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2018 (1) TMI 1065 - AT - Income TaxEligibility to exemption u/s.54F - denial of claim because prior to investment in flat, the assessee deposited sale proceeds of original assets in FDR account and not in capital gain account scheme - Held that:- The assessee sold his flat on 2nd April, 2008 for a consideration of ₹ 30,40,000/- - entire sale proceed was invested in term deposit on 07.04.2008 because he was under bonafide belief that it would meet the requirements of Sec.54 i.e. investment of sale proceeds in a bank account and its investment in a house within two years from the date of transfer of original asset - Return of Income was filed on 22.07.2009 (Due date in terms of Sec. 139(1) and 139(4) was 31.07.2009 and 31.03.2011 respectively). He acquired a new flat on 21.11.2009 out of proceeds of term deposit and such acquisition was within two years from the date of sale of original capital asset. Thus he satisfied the primary requirement of Sec.54(1). Although the failure of the assessee to deposit the sale proceeds in a Capital Gains Account Scheme, 1988 for intervening period was undoubtedly a technical default, he should not be penalized for the same because he satisfied the real intent as well as essence of the provisions by depositing the sale proceeds in FDR since beginning, not using it for any other purpose and investing the sale proceeds in acquisition of a new house within statutory period of 2 years. Sec.54 is an incentive provisions and it should be interpreted and applied liberally as held by the honourable Supreme Court in the case of Bajaj Tempo Ltd. Vs. C.I.T. (1992 (4) TMI 4 - SUPREME Court). - Decided in favour of assessee
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