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TMI Blog2022 (4) TMI 678X X X X Extracts X X X X X X X X Extracts X X X X ..... r Capital Gains Scheme on/or before the due date of filing of return of income under section 139(1) of the Act. As per assessee has utilized the amount for the purchase of new asset and paid the amount vide cheque dated 13.02.2015 and the amount has been utilised for the purchase of new asset prior to the due date of filing return of income under section 139(4) - It is pertinent to note that for claiming any benefit under section 54 of the Act, it is first of all required under sub section (1) that capital gains arising from transfer of long term capital asset should be utilized for the purpose of purchase of new residential house within a period of either one year before or two years after the date of transfer of earlier asset or the same has been utilized for construction of residential house within a period of three years from the date of such transfer. In the present case, it is relevant to note that the assessee sold the earlier house property on 31.01.2013, thus, the time period for utilization of the capital gains arising from such transfer was available till 31.01.2015, in case of purchase of new residential house and till 31.01.2016, in case of construction of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in not following the various decisions of Bombay High Court and Honorable Mumbai ITAT, which claimed that deduction u/s 54 is to be allowed even if the investment in Capital Gain scheme is made within the due date prescribed u/s 139(4). 3. The Learned Assessing Officer and CIT(A) erred in recognizing the fact that the Assessee had done all that she could do to make the investment in Capital Gain scheme and also issued the cheque and thus complied with provision of Section 54 as per the guidelines of Bombay High Court in case of Mrs. Hila J B Wadia, 215 ITR 376. 3. The brief facts of the case for deciding the present appeal as emanating from the record are: The assessee is an individual and has filed the return of income on 31.07.2013 declaring total income at ₹ 17,41,067. During the year under consideration, the assessee derived income from salary, house property, capital gains and interest. On 31.01.2013, assessee sold a house property for ₹ 95,00,000 which resulted in Long Term Capital Gains of ₹ 74,18,885 out of which ₹ 50,00,000 was invested in a new residential property and the balance of ₹ 24,25,000 was deposited in the Capital Gain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the utilization of sale consideration are made for purchase / construction of property before the date of filing the return, it made for purchase / construction of property before the date of filing the return, it was mentioned as before the date of furnishing the return of income under section 139. In the second situation, where the amounts are to be deposited in the specified modes it was mentioned as such deposit being made in any case not later than the due date applicable in eth case of the assessee for furnishing the return of income under section 1 of section 139. Thus from the above it is clear that the time limits for the purpose of utilization of sale proceeds for purchase / construction of property before the date of filing of return and for the purpose of making deposits in the specified modes are totally different. In the former case, it was the date of filing the return u/s 139. In the later situation it was the date of file return u/s 139(1) of the Income Tax Act. Accordingly, the Assessing Officer disallowed the claim of exemption made by the assessee under section 54 of the Act of ₹ 24,25,000, and computed the Long Term Capital Gain at ₹ 24,18, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndividual or a Hindu undivided family, the capital gain arises from the transfer of a long-term capital asset, being buildings or lands appurtenant thereto, and being a residential house, the income of which is chargeable under the head Income from house property (hereafter in this section referred to as the original asset), and the assessee has within a period of one year before or two years after the date on which the transfer took place purchased, or has within a period of three years after that date constructed, one residential house in India, then, instead of the capital gain being charged to income-tax as income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section, that is to say,- .. (2) The amount of the capital gain which is not appropriated by the assessee towards the purchase of the new asset made within one year before the date on which the transfer of the original asset took place, or which is not utilised by him for the purchase or construction of the new asset before the date of furnishing the return of income under section 139, shall be deposited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The date on which the assessee issued cheque in respect of the new house. vi) 31.03.2015 Last date for filing belated return u/s 139(4) 11. In the present case, the cheque issued by the assessee and submitted to the bank on 31.07.2013, was deposited in the capital gain account on 13.08.2013. To this extent, there is no dispute amongst the parties. The assessee s claim is that the cheque and other documents relevant for the purpose of capital gains account was duly submitted to the bank on 31.07.2013, and only after confirmation from the bank, the return of income was filed on 31.07.2013, inter-alia, claiming benefit under section 54 of the Act. In the alternative, it has been submitted that the amount was subsequently withdrawn and has been deposited for the purchase of new residential house within the time period for filing the return of income under section 139(4) of the Act. 12. For the relevant assessment year, the due date for furnishing the return of income under section 139(1) of the Act was 31.07.2013, which as per record was further extended by the CBDT to 05.08.2013. Furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he exemption by making an investment towards purchase or construction of the new asset would still be available, subject to the condition that the assessee had deposited the amount of such capital gain in the CGAS account with the specified bank by the 'due date' contemplated under Sec. 139(1) of the Act. Further, in case if any part of the capital gain had already been utilized by the assessee for the purchase or construction of the new asset, the amount of such utilization along with the amount so deposited shall be deemed to be the cost of the new asset. We are of the considered view that the outer limit for the purchase or construction of the new asset as per subsection (2) of Sec. 54 is the date of furnishing of the 'return of income' by the assessee under Sec. 139. On a plain and literal interpretation of the aforesaid statutory provision, it can safely be gathered that the conscious, purposive and intentional providing by the legislature of date of furnishing the return of income under Sec. 139 cannot be substituted and narrowed down to Sec. 139(1) of the Act. We are,-of the considered view, that the date of furnishing of the return of income under Sec. 139 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TO, ITA no.5733/Mum./ 2017, order dated 01.03.2019. 14. Thus, in all the above decisions relied upon by the learned A.R., during the course of hearing, the Co ordinate Bench of the Tribunal granted the relief by liberal construing the expression date of furnishing of return of income under section 139 of the Act to include within its sweep the time limit provided for filing the return of income under section 139(4) of the Act. 15. Under section 54(2) of the Act, as also recorded by the Assessing Officer as well as the CIT(A), there are two different dates specified for the investments under section 54 of the Act. In the first situation, where the utilization of sale consideration is made for purchase / construction of property before the due date of filing the return of income, the expression used in section 54(2) is before the date of furnishing the return of income under section 139 . In the second situation, where the amounts are to be deposited in the specified modes, section 54(2) of the Act uses the expression for furnishing the return of income under sub-section (1) of section 139 . Thus, for both the purposes, i.e. (i) for utilization for purchase / constructi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, is allowable under section 54 of the Act, is concerned the same merit acceptance in view of the aforesaid judicial precedences. However, it is pertinent to note that for claiming any benefit under section 54 of the Act, it is first of all required under sub section (1) that capital gains arising from transfer of long term capital asset should be utilized for the purpose of purchase of new residential house within a period of either one year before or two years after the date of transfer of earlier asset or the same has been utilized for construction of residential house within a period of three years from the date of such transfer. In the present case, it is relevant to note that the assessee sold the earlier house property on 31.01.2013, thus, the time period for utilization of the capital gains arising from such transfer was available till 31.01.2015, in case of purchase of new residential house and till 31.01.2016, in case of construction of the new residential house, under section 54(1) of the Act. It is an undisputed fact that in the present case, the assessee has not utilized the amount for the purpose of construction of the residential house and the initial amount of &# ..... X X X X Extracts X X X X X X X X Extracts X X X X
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