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TMI Blog2007 (7) TMI 380X X X X Extracts X X X X X X X X Extracts X X X X ..... g before the Commissioner of Income-tax (Appeals) III, Jaipur; (iv) the costs of the writ petition may also be awarded to meet the ends of justice; and (v) any other order/relief as your Lordships may deem fit and proper in the facts and circumstances of the case may kindly be passed in favour of the petitioner, in the interest of justice, equity and good conscience." 3. The petitioner has come before this court in extraordinary jurisdiction under article 226 of the Constitution of India claiming the limited relief that the respondents income-tax authorities had erred in making a provisional attachment of three FDRs of Es. 1 crore of the petitioner vide the impugned attachment order dated April 17, 2007, passed under section 281B of the Income-tax Act, 1961 (for brevity, hereinafter to be referred as "the Act"), though the demand on the capital gains on the sale of the agricultural land made by the petitioner-assessee was only to the extent of Rs.30,97,103 vide the assessment order dated February 16, 2007. 4. Learned counsel for the assessee submits that on account of attachment of the FDRs of excessive amount of Rs. 1 crore, the petitioner-assessee was deprived of his opportun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se he does not succeed in his appeal. He further submits that the question regarding exemption from capital gains is involved in the appeal, which is pending before the learned Commissioner of Income-tax (Appeals), therefore, this court may not decide the said issue. 6. Learned counsel for the petitioner Mr. Naresh Gupta has relied upon the Division Bench judgment of the Gauhati High Court in CIT v. Rajesh Kumar Jalan reported in [2006] 286 ITR 274 (Gauhati); [2006] 157 Taxman 398; [2006] 206 CTR 361, wherein the Gauhati High Court held referring to section 53A of the Transfer of Property Act that if the possession of the property is taken by the purchaser within the stipulated period of two years, the assessee would be entitled to benefit of exemption from capital gains under section 54(2) of the Act, which is akin to section 54B of the same Act. The court held as under, extracting and approving the Income-tax Appellate Tribunal's order in appeal: "Extract of Income-tax Appellate Tribunal order (page 281 of 286 ITR): 11. Therefore, for the purpose of transfer the possession of the flat in part performance of the contract under section 53A of the Transfer of Property Act is esse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the hon'ble Kerala High Court squarely applied to the case before us as the assessee had acquired the house at a cost more than the capital gains within the specified period. 13. Therefore, we hold that the assessee is entitled for the exemption under section 54 of the Act for the entire long-term capital gain of Rs. 29,73,048. Accordingly, we allow the ground of appeal of the assessee and reject the ground of appeal of the Department." The Gauhati High Court (page 282): "6. From a plain reading of sub-section (2) of section 54 of the Income-tax Act, 1961, it is clear that only section 139 of the Income-tax Act, 1961, is mentioned in section 54(2) in the context that the unutilised portion of the capital gain on the sale of property used for residence should be deposited before the date of furnishing the return of the income-tax under section 139 of the Income-tax Act. Section 139 of the Income-tax Act, 1961, cannot be meant only as section 139(1) but it means all sub-sections of section 139 of the Income-tax Act, 1961. Under sub-section (4) of section 139 of the Income-tax Act, any person who has not furnished a return within the time allowed to him under sub-section (1) of sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from its transfer within a period of three years of its purchase, the cost shall be nil; or (ii) if the amount of the capital gain is equal to or less than the cost of the new asset, the capital gain shall not be charged under section 45; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase, the cost shall be reduced, by the amount of the capital gain. (2) The amount of the capital gain which is not utilised by the assessee for the purchase 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 utiised in accordance with, any scheme which the Central Government may, by notification in the Official Gazette, frame in this behalf and such return shall be accompanied by proof of such deposit ; and, for the purposes of sub-section (1), the amount, if any, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption from capital gains is pending before the appellate authority, this court would not express any final opinion on that issue at this stage and the appellate authority should consider the said issue in accordance with law on the basis of material placed before him. 9. That as far as the attachment of three FDRs of Rs.1 crore is concerned, there is not much dispute between both the sides that if the payment as directed by the learned Commissioner of Income-tax-III, Jaipur is made immediately upon the release of these FDRs and the interest of the Revenue to the extent of balance amount is adequately safeguarded, the balance amount over and above the disputed demand of Rs.30,97,103 can be released in favour of the petitioner-assessee. 10. In view of the facts and circumstances of the case, this writ petition is disposed of with the direction to the respondents to release the three FDRs from the attachment, provided the petitioner first submits an undertaking and immediately upon release of the FDRs pays the 30 per cent. of the disputed demand, i.e., Rs. 15,48,550 as directed by the Commissioner of Income-tax in his order dated May 16, 2007 within a week of the release of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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