2022 (11) TMI 196 - AT - Income Tax
Addition u/s 54 - Claim denied as the amount remained uninvested till 05.08.2016 which was due date of filing the ITR under section 139(1) - capital gain account deposit was delayed by 31 days - CIT-A deleted the addition - HELD THAT:- It is not in dispute that there was 31 days delay in depositing the amount in the capital gain account i.e. the due date for filing return under section 139(1) of the Act for assessment year 2016-17 i.e. 05.08.2016. But the deposit of Rs. One crore each were made by the assessee on 26.09.2016 and 27.09.2016 in the capital gain account. Further it is also not in dispute that the assessee had paid the entire capital gain deposits along with interest accrued thereon directly from the capital gain deposit to the parties for expenses relating to construction for new house between 02.11.2017 to 03.02.2018 within three years, in compliance with Section 54(1) of the Act.
The intention of the legislature in section 54 of the Act is very much clear that an assessee who receives the sale consideration has to invest in the new house within specified time framed. Merely because the assesssee has not able to deposit or deposited with a delay of 31 days in the capital gain account he cannot be denied with the benefit of section 54(1) of the Act.
The above view has been fortified by the judgment of Hon’ble High Court of Karnataka in the case of CIT Vs. Ramachandra Rao [2015 (4) TMI 620 - KARNATAKA HIGH COURT] wherein the very same substantial question of law has been decided in favour of the assessee.
Thus CIT(A) has rightly deleted the addition made u/s 54 and the order of the Ld. CIT(A) requires no interference. Accordingly, we do not find merit in the Grounds of Appeal of the Revenue.