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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 ..... 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 Rs. 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 Rs. 95,00,000 which resulted in Long Term Capital Gains of Rs. 74,18,885 out of which Rs. 50,00,000 was invested in a new residential property and the balance of Rs. 24,25,000 was deposited in the Capital Gains Scheme to avail exemption from Capital Gains Tax. During the course of scrutiny assessment, it was observed that assessee had deposited sales consideration of capital asset in account under Capital Gains Scheme on 13.08.2013 i.e. after the due date of filing of return of income under section 139(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 Rs. 24,25,000, and computed the Long Term Capital Gain at Rs. 24,18,885. 5. In appeal, the CIT(A) vide impugned order dated 23.10.2019, upheld the order passed by the Assessing Officer and dismissed the appeal filed by the assessee holding that for the purpose of availing the benefit under section 54(2) of the Act, amount of capital gain, which is not apportioned/utilised by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee 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 by him before furnishing such return [such deposit being made in any case not later than the due date applicable in the case of the assessee for furnishing the return of income under sub-section (1) of section 139] in an account in any such bank or institution as may be specified in, and utilised in accordance with, any schem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 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. Further, the due date for furnishing the belated return of income under section 139(4) of the Act was 31.03.2015. As per the provisions of section 54(2) of the Act, for claiming benefit of the section 54, any amount of capital gains not utilized for purchase / construction of residential house is required to be deposited in account maintained with the bank under Capital Gains Scheme on/before the due date for filing of the return of income under section 139(1) of the Act. In the present case, it is evident that the amount of capital gains, which was not utilized by the assessee for the purpose of purchase of new residential house, was not deposited in Capital Gains Scheme account on/before 31.07.2013 (or 05.08.2013 as exte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 would safely encompass within its sweep the time limit provided for filing of the 'return of income' by the assessee under Sec. 139(4) of the Act. In the backdrop of the aforesaid settled position of law, we are of the considered view that subsection (2) of Sec. 54 contemplates two situations viz. (a) a case where the assessee had appropriated the amount of LTCG towards acquisition of the new asset within a period of one year before the date on which the transfer of the original asset took place or for the purchase or construction of the new asset before the date of furnishing the return of income under Sec. 139 of the Act; and (b) a case where the assessee had not appropriated the amount of the capital gain befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 / construction of property; and (ii) for deposit in the specified modes, different time lines have been provided under section 54(2) of the Act. The aforesaid decisions of the Co-ordinate Bench of the Tribunal, relied upon by the learned A.R., dealt with the first situation where the sale consideration was utilised for purchase / construction of the property and accordingly the Co-ordinate Bench of the Tribunal liberally construed 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. Thus, we are of the view that these decisions do not support the contention of the learned A.R. that the expressio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .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 Rs. 50,00,000 and subsequent payment of Rs. 24,25,000 was made in respect of purchase of new residential house. Thus, in view of the above, the assessee was required to utilize the capital gains till 31.01.2015 i.e., within the period of two years from the date on which the earlier asset was sold, for the purpose of claiming benefit under section 54 of the Act. However, in the present case, though the first payment of Rs. 50,00,000 was made within a period of two years and thus not in dispute, the second payment of Rs. 24,25,000 was made vide cheque dated 13.02.2015, i.e. beyond the period of two years as per section 54(1) of the Act, for the purchase of new residential house. Thus, even if the provisions of section 54(2) of the Act are li ..... X X X X Extracts X X X X X X X X Extracts X X X X
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