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TMI Blog2024 (11) TMI 169X X X X Extracts X X X X X X X X Extracts X X X X ..... certiorari to quash the impugned re-assessment order dated 28.03.2022 passed under Section 147 read with Section 144B of Income Tax Act bearing No.ITBA/AST/S/147/2021- 22/104850523(1) produced as ANNEXURE-E issued by Respondent No. I; ii. Issue a writ or such other order in the nature of certiorari to quash the demand notice under section 156 of the Act dated 28.03.2022 bearing No.ITBA/AST/S/156/2021-2/1041853425(1) produced as ANNEXURE issued by Respondent No.1; iii. Issue a Writ or Order in the nature certiorari quashing the penalty notice under Section 274 read with 270 A dated 28.03.2022 bearing No. ITRBA/PNL/S/270A/2021-22/1041851447(1) produced as ANNEXURE-G issued by Respondent No. I. 2. Heard the learned counsels for the parties and perused the material on record. 3. A perusal of the material on record will indicate that it is an undisputed fact that the petitioner sold the original asset, which was an industrial land for a total sale consideration of Rs. 3,05,00,000/- on 29.08.2016, and from out of the sale proceeds, the petitioner invested a sum of Rs. 1,86,55,700/- towards purchase of a residential site on 01.06.2017. On 29.09.2017, the petitioner filed income tax retur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ightly contended by the learned counsel for the petitioner, under identical circumstances in the cases where non- investment of the sale consideration or portion thereof in the designated capital gains would not come in the way of the petitioner claiming exemption so long as the petitioner had invested the said amount for construction came up for consideration before the Division Bench of this Court in the case of Shri. K. Ramachandra Rao [supra] where in, it was held as under: 3. The two substantial questions of law which arise for consideration in these batch of appeals are as under :- 1) Whether the assessee is entitled to the benefit conferred under Section 54F when the sale consideration is utilized for construction of a residential house on a site which is owned by him within one year from the date of transfer? 2) When the assessee invests the entire sale consideration in construction of a residential house within three years from the date of transfer can he be denied exemption under Section 54F on the ground that he did not deposit the said amount in capital gains account scheme before the due date prescribed under Section 139(1) of the IT Act? 4.Re.PointNo.1 Section 54(F) d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the date of the transfer of the original asset, or constructs, within the period of three years after such date, any residential house, the income from which is chargeable under the head Income from house property , other than the new asset, 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 such new asset as provided in clause (a), or, as the case may be, clause (b), of sub-section (1), shall be deemed to be income chargeable under the head Capital gains relating to long-term capital assets of the previous year in which such residential house is purchased or constructed. (3) Where the new asset is transferred within a period of three years from the date of its purchase or, as the case may be, its construction, 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 such new asset as provided in clause (a) or, as the case may be, clause (b), of sub-section (1) shall be deemed to be income chargeable under the head Capital gains relating to long-term capital assets of the previous year in which such new asset is transferred.] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... three years after that date constructed a residential house, the capital gain shall be dealt with in accordance with the said provision. This is subject to the provisions of Sub Section (4). Sub Section (4) stipulates if the amount of net consideration which is not appropriated by the assessee towards the purchase of the new asset made within one year before the date on which transfer of the original asset took place or which is not utilized by him for the purchase or construction of the new asset before the date of furnishing the return of income under Section 139 of the Act shall be deposited by him before furnishing such return in any case not later than the due date applicable in the case of the assessee for furnishing the return of income under Section 139(1) of the Act in an account in any such bank or institution as specified and utilized in accordance with any scheme which the Central Government may, by notification in the official gazette framed in this behalf. Sub Section (4) is attracted only to a case where the sale consideration is not utilized either for purchase or for construction of a residential house. It has no application to a case where the assessee invests th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e wants the benefit of Section 54F, then he should deposit the said capital gains in an account which is duly notified by the Central Government. In other words if he want of claim exemption from payment of income tax by retaining the cash, then the said amount is to be invested in the said account. If the intention is not to retain cash but to invest in construction or any purchase of the property and if such investment is made within the period stipulated therein, then Section 54F(4) is not at all attracted and therefore the contention that the assessee has not deposited the amount in the Bank account as stipulated and therefore, he is not entitled to the benefit even though he has invested the money in construction is also not correct. 5. For the aforesaid reasons both the substantial questions of law are answered in favour of the assessee and against the Revenue. Therefore, we do not see merit in any of the appeals. Accordingly, all the four appeals are dismissed. So also in the cases of Smt. B.S.Shanthakumari and Shri R. Srinivas [supra], the Division Bench also reiterated the same position. In view of the law laid down by the Division Bench to the effect that mere non-deposit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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