TMI Blog1999 (4) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... e construction of a house within the permissible period. 3. With reference to the return filed the Assessing Officer issued a "deficiency letter" on 20-9-1989 under section 139(9) asking the assessee to specify the "nature of account No. 9248 with the Punjab National Bank, Faridabad alongwith the proof of deposit under Capital Gains Account Scheme 1988". In the first reply dated 4-10-1989 the assessee chose to remain silent on the "Capital Gains Account Scheme 1988" whereas in the second reply purported to have been filed dated 12-10-1989, the assessee expressed his ignorance about the "scheme" further stating that his enquiry from the bank at Faridabad did not bring forth any information on the said "scheme". The assessee however stated in the said reply that the whole of the net consideration of Rs. 4,95,000 would be utilised on the construction of the residential house "within a period of 1 1/2 years" and as such no capital gain arose from the transfer. 4. means of an intimation dated 31-10-1989 the Assessing Officer made an "adjustment" of Rs. 1,06,240 to the returned income by allowing benefit under section 54F of the amount spent upto the date of filing of the return. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said saving bank account but stated that this could not be termed as a "deficiency letter" within the meaning of section 139(9) as it was more in the nature of a clarification sought. The ld. counsel also referred to the copy of the return of income filed by the assessee alongwith various enclosures and also read out relevant portions of the application filed under section 154. Further any argument was to the effect that in case it was assumed that the assessee had acted in violation of the legal provision then it at the most could be treated as a technical breach of law and what was important was that the amount had been utilised for the purpose set out in the relevant provision of the Act i.e. construction of a residential house. It was further stated that the scheme of investment was notified on 22-6-1988 and the assessee had sold his plot of land on 12-10-1988 and on a query from the bank, no information came forth about the nature of the scheme so notified and Bank Manager at Jind by means of a letter dated 27-2-1990 confirmed that no such scheme was available with the bank. The ld. counsel also advanced an argument to the effect that everybody was not supposed to know the la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied in 1988 and the assessee was expected to know about it and deposit the amount accordingly. The ld. DR further stated that the assessee had not cared to mention the nature of the bank account in the return and under these circumstances the Assessing Officer was justified in making "adjustment" and which he in fact did after issuing the "deficiency letter". In support of his arguments he placed reliance on the judgment of the Hon'ble Madhya Pradesh High Court in the case of Kamal Textiles v. ITO [1991] 59 Taxman 555. Arguments were also advanced by the parties with reference to two judgments of the Hon'ble Calcutta High Court in the case of Modern Fibotex India Ltd v. Dy. CIT [1995] 212 ITR 496 and Coates of India Ltd. v. Dy. CIT (No. 1) [1995] 214 ITR 498. 9. In a short reply the ld. counsel stressed that the scheme was only made to facilitate the working of the department as under the earlier law rectification proceedings had to be resorted to but the change did not effect the earlier provision of making investment in property which was the main motive. According to the ld. counsel a part of the sale consideration had been invested in FDRs and even the interest earned thereon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . within six months of the sale of the capital asset, there was due compliance with the relevant provision of law i.e. section 54F. In the present case the non-compliance with the provisions of sub-section (4) of Section 54F can not be placed in the same category i.e. a procedural step. 12. No doubt the intention in a case may stand complied with but the same must be done in the manner provided by law. 13. Sub-section (4) to Section 54F was added no doubt with a view to lighten the burden on the revenue in carrying out numerous rectifications but this was equally meant to ease the work load on the assessees who had to deal with the implications of the orders passed and the consequential tax demands. It cannot be argued that a provision of law enacted to facilitate the working of the revenue is not to apply to the assessee and he can violate the same even after gaining knowledge of the same. It may be appreciated that the legal requirement of depositing under the "Capital Gains Account Scheme 1988" was part of the main section and not any rule or circular or instruction of the Board and squarely applicable to the facts of the case. 14. Dealing with some of the other decisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 54F and he proceeded to make necessary "adjustment" while issuing the intimation. In my opinion the "adjustment" and the subsequent rejection of application by Assessing Officer under section 154 and the confirmation of the same by the Commissioner (Appeals) were in order and valid as the claim made under section 54F was incorrect and prima facie inadmissible. The Bombay Bench of the Tribunal in the case of Premier Automobiles Ltd., while vacating the "adjustment" took note of the fact that the return filed by the assessee was not treated as defective and no communication sent to it under section 139(9) whereas in the present case a defect letter has been duly sent. 17. I am further of the view that CBDT Circular of 24-8-1994 made explicit what earlier was implicit and the reference to the provision of sub-section (4) of section 54F was only by way of an illustration and there is, therefore, no necessity for me to consider whether the circular is prospective or retrospective. 18. There can be no quarrel for the proposition that an opinion to the effect that the claim is prima facie inadmissible must flow from the return itself. Applying this to the facts of the present ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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