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TMI Blog2022 (1) TMI 598X X X X Extracts X X X X X X X X Extracts X X X X ..... t the withdrawal of the remaining amount for the same to be utilised as may be legally permissible. However, for so doing he would be requiring not only the payment of the tax as provided u/s 54 F of the Act in the proviso clearly while reading the said provision and Section 45 of the Act. With no mechanism or modality provided for the withdrawal of the amount which at one point of time had been contemplated for the purchase of the residential premises from the amount of Capital Gains under the said scheme, the request had been made to the respondent for issuance of the No Objection Certificate to which for the apprehension ventilated before this Court, it has chosen not to issue the same. We see no reason for the authority concerned not to allow this. More particularly, on the entire amount the advance tax of ₹ 1.25 crore is already paid. It is given to understand that ordinarily the tax which is being offered from the professional income is over the period of time being regularly paid and at no stage the petitioner has defaulted. The said amount of ₹ 1.25 Crore is not to be adjusted against any possible loss which is quite unlikely and the same has been stated b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome Tax Act, 1961 ( the Act for short), the amount has been deposited with the Bank of India in terms of Capital Gains Scheme Accounts, 1988. The disclosure of the said sale of parcel of land in the return of income of AY 2019-20 reveals that the claim of deduction under section 54F at ₹ 4.65 crores in Nil while computing the taxable Capital Gain. 3. Prayer sought for are as follows: 7. The Petitioner, therefore, prays that this Hon ble Court be pleased to issue a writ of mandamus or a writ in the nature of mandamus or a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ, direction or order and be pleased to: (a) quash and set aside the impugned order at Annexure- A to this Petition and direct the Respondent to issue No Objection Certificate to the petitioner; (b) pending the admission, hearing and final disposal of this petition, to stay implementation and operation of the order at Annexure- A to this petition and stay recovery of tax for A.Y.2018-19 and further be pleased to direct the Respondent to issue No Objection Certificate to the Petitioner; (c) any other and further relief deemed just and proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me gained ₹ 4.75 Crore. 4.3 Desirous of investing the gain into a residential home in terms of Section 54 F of the Act, he claimed exemption under Section 54 F of the Act by depositing the amount of ₹ 4.67 Crore with the Bank of India in terms of Capital Gains Accounts Scheme, 1988. 4.4 The petitioner filed the return of income for the Assessment Year 2019-2020 on 23.09.2019 disclosing the sale of land parcel and computed the taxable Capital Gain as Nil after the claim of deduction under Section 54 F of the Act. 4.5 The interest upon the amount deposited with the Bank of India had been received by the petitioner. According to him, he was waiting for the opportunity to invest in the residential home. However he could find the viable opportunity after a long time and the maximum time allowable under Section 54 F since is three years from the date of transfer to construct the residential house, his time is expiring on 23.12.2021. It is averred that since he is not in a position to carry out the desired objective, he seeks to withdraw the money deposited with the Bank to utilize the same for the purchase of land. As a No Objection Certificate of the respondent was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t necessary undertaking is being offered by the petitioner when he offered the Capital Gains on such transfer in the return of income to be filed for the Assessment Year 2022-2023 in terms of Section 54 F of the Act. He has undertaken to supply the physical copy of the return of income for the Assessment Year 2022-2023 to the Jurisdictional Assessing Officer no sooner then he e-files the return of income under the provision of Section 139 of the Act. He has also further undertaken not to claim the set off of any business/professional loss against the said Capital Gain that he may offer in the Assessment Year 2022-2023. 5.2 Learned counsel has relied on the following two decisions to substantiate his submissions: (I) Professor P.N.Shetty vs. Office of Income-tax Officer, reported in (2019) 112 taxman.com 218 (Karnataka). (II) Padma Swaminathan vs. Income Tax Officer, Non-Corporate Ward-15(4), Chennai, reported in (2017) 88 taxman.com 596 (Madras). 6. From the Capital Gain Account Scheme the learned senior standing counsel, Ms.Maithili Mehta has urged that the offering of sum of ₹ 1.25 Crore may not suffice as there may be a possibility at the time of filing of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordance with the following provisions of this section, that is to say, (a) if the cost of the new asset is not less than the net consideration in respect of the original asset, the whole of such capital gain shall not be charged under section 45; (b) if the cost of the new asset is less than the net consideration in respect of the original asset, so much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of the new asset bears to the net consideration, shall not be charged under section 45: [Provided that nothing contained in this sub-section shall apply where- (a)the assessee,- (i) owns more than one residential house, other than the new asset, on the date of transfer of the original asset; or (ii) purchases any residential house, other than the new asset, within a period of one year after the date of transfer of the original asset; or (iii) constructs any residential house, other than the new asset, within a period of three years after the date of transfer of the original asset; and (b) the income from such residential house, other than the one residential house owned on the date of transfer of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in accordance with, any scheme which the Central Government may, by notification in the Official Gazette, frame in this behalf and such return shall be accompanied by proof such of deposit; and, for the purposes of sub-section (1), the amount, if any, already utilised by the proof of such deposit: assessee for the purchase or construction of the new asset together with the amount so deposited shall be deemed to be the cost of the new asset: Provided that if the amount deposited under this subsection is not utilised wholly or partly for the purchase or construction of the new asset within the period specified in sub-section (1), then, (i) the amount by which (a) the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of the new asset as provided in clause (a) or, as the case may be, clause (b) of sub-section (1), exceeds (b) the amount that would not have been so charged had the amount actually utilised by the assessee for the purchase or construction of the new asset within the period specified in sub-section (1) been the cost of the new asset, shall be charged under section 45 as i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... struction of new asset, then it shall be charged under Section 45 of the Act as income of the previous year in which the period of three years from the date of transfer of the original asset expires. 7.2 Apt would be to refer to Section 45 of the Act at this stage: 45. Any profits or gains arising from the transfer of a capital asset effected in the previous year shall, save as otherwise provided in Section 54, 54B...54D, 54E, 54EA, 54EB, 54F, 54G and 54H be chargeable to income-tax under the head Capital gains , and shall be deemed to be the income of the previous year in which the transfer took place. 7.3 Thus, any profit or gains arising from transfer of capital asset effected in the previous year shall be chargeable, as provided under the provisions of Sections 54, 54B which includes Section 54F to income tax under the head Capital Gains and shall be deemed to be the income of the previous year in which the transfer took place. 8. The High Court of Karnataka in case of Professor P.N.Shetty (supra) was dealing with a case where assessee had sold the immovable property and deposited the Capital Gain of ₹ 1.15 Crore in Capital Gain Account Scheme, 1988 and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e petitioner along with the other co-owners had received the consideration of ₹ 19 Crore and being the 1/4th owner of the property, he gained ₹ 4.75 Crore from the sale of this land. With an intent to invest it into the residential house, he had deposited the amount with the Bank of India in terms of Capital Gains Account Scheme, which provides the modalities of the deposits to be made, the types of deposits, the application for opening account, the issuance of duplicate pass book or receipt, transfer and conversion of the account, the interest to be paid on such amount and also provides for the withdrawal from the account. It provides that a depositor having an account may at any time after making the initial subscription, may apply in Form C nearer as possible together with the pass book to the deposit office for withdrawal of the amount from the balance to his credit subject to the other provisions of this scheme. It also provides for utilisation of the amount of withdrawal, nomination and the closure of the account. 10.1 Apt would be to reproduce para 13(1) of the Capital Gains Account Schemes which provides thus: Closure of the account. 13(1). If a d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss which is quite unlikely and the same has been stated by way of an affidavit. It has been undertaken further that while filing of the return, physical copy shall be also given to the Assessing Officer having the jurisdiction. With all possible loopholes having been plugged cementing the same with the affidavit tendered before this Court additionally pursuant to the submissions made by the learned senior standing counsel, Ms.Maithili Mehta, the action of the Assistant Commissioner, Income Tax dated 20.10.2021 whereby he denied to issue the No Objection Certificate for the balance withdrawal of the deposit deserves and warrants interference. 14. From the robust facts which have been set out coupled with the circumstances which exist in the instant case and being convinced with the credibility of the petitioner as the assessee of income tax department over the years, the Court is of the opinion that this petition deserves to be permitted. 15. We accordingly allow the present petition and direct the respondent authority concerned that from the part of the amount deposited in the Capital Gain Account Scheme, the amount which remains shall be permitted to be withdrawn. 15.1 Le ..... X X X X Extracts X X X X X X X X Extracts X X X X
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