TMI Blog2010 (12) TMI 217X X X X Extracts X X X X X X X X Extracts X X X X ..... uchers of Bharat Petroleum Corporation describes the payment as made towards a residential premises. The Municipal Corporation of Grater Bombay levied municipal taxes on the ground that this is a residential property. The Secretary, Housing and Special Assistance Department, Govt. of Maharashtra, Mantralaya, Bombay has also considered it as residential property - All the above evidences clearly demonstrate that this is a residential property. - Decided in favor of assessee - AO directed to allow the deduction u/s 54. Section 54(2) requires that in case the capital gain is not appropriated by the assessee for purchase for a new asset or for constructing of the new asset before the date of furnishing the return of income u/s 139, he should deposit the same not later than the due date prescribed for filing a return of income u/s 139(1) in a specified bank account - The return shall be accompanied by proof of such deposit - The assessee produced the proof during the course of assessment proceedings and in such circumstances, in our humble opinion, the claim should be allowed - In the last WILL and testament, the Trombay House is referred to as a residential property of ground and two u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on should be deposited in specified account before the due date of filing of the return u/s 139(1). He vehemently contended that there is no condition in the Act that the return itself should be filed within the time specified u/s 139(1). He pointed out to the evidence filed in the assessee s paper book from pages 38 to 41 and submitted that the sale proceeds were deposited in the specified account on 31-7-2006 which is the due date of filing of the return u/s 139(1) and hence there is no violation of the conditions stipulated under the Act. 5. On the issue of attachment of the proof of deposit with the return of income, the learned counsel submitted that due to inadvertence, the proof was not attached but was filed with the authorities subsequently. He submitted that the condition is only directory and not mandatory. He vehemently contended that the factum of depositing the money in the bank and the date of deposit cannot be manipulated and that the mere fact that the assessee missing out on attaching this proof to the return of income should not result in huge hardship by way of disallowance u/s 54. He submitted that as the proof is filed during the course of assessment proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he issue may be set aside to the AO for fresh adjudication after verifying the facts. 8. The learned DR, Mr. S.K. Singh, on the other hand, opposed the contentions of the assessee and submitted that section 54 mandates that the assessee should file a return of income within the time specified u/s 139(1), if it has to get the benefit of exemption u/s 54. He took this Bench through the order of the CIT (Appeals) and relied on the same. He further submitted that the amount of sale proceeds, which were not used for the purpose of new assets should have been deposited in the bank in the capital gains scheme before furnishing the return of income u/s 139(1) and the proof should have been attached to the return of income. He submitted that this is a mandatory condition u/s 54(2) and not doing the same would disentitle the assessee to claim deduction u/s 54. He submitted that when the word in the taxation statute, is unambiguous, same should be applied. For this proposition he relied on the following case laws : Patil Vijaykumar and Others 151 ITR 48 (Kar.) Seshasayee Paper and Boards Ltd. 272 ITR 165 IPCL Laboratory Ltd. 266 ITR 521 (SC) On the issue whether it is a resi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r took place, it shall be dealt with in accordance with the following provisions of this section, that is to say, - if the amount of the capital gain [is greater than the cost of [the residential house] so purchased or constructed (hereafter in this section referred to as the new asset)], the difference between the amount of the capital gain and the cost of the new asset shall be charged under section 45 as the income of the previous year, 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 or construction, as the case may be, the cost shall be nil , or 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 or construction, as the case may be, the cost shall be reduced by the amount of the capital gain. [(2) The amount of the capital gain which is not appropriated by the assessee towards the purchase of the new asset made within one year be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me u/s 139. The Revenue in this case is equating the requirement of depositing the money in the specified bank account before the due date for filing of the return specified u/s 139(1) as a requirement that the assessee should file the return within the time prescribed u/s 139(1). Section 54(2) does not specify such requirement. Thus, this basis of rejection of the claim u/s 54 is wrong. 15. Coming to the second requirement that the return shall be accompanied by proof of such deposit, we find that the factum of deposit of the amount in an account with a bank or an Institution notified in the Central Government Official Gazette, is not disputed. The requirement of attaching the proof with the return of income, in our considered opinion, is only directory. If it is to be taken that this is a mandatory condition, then the return, in our humble opinion, would become a defective return and the AO should have considered the same as such u/s 139(9) and issued notice to the assessee for rectification of the same. The assessee produced the proof during the course of assessment proceedings and in such circumstances, in our humble opinion, the claim should be allowed. Not attaching the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the last WILL and testament, the Trombay House is referred to as a residential property of ground and two upper floors at para 16 of the WILL. The vouchers of Bharat Petroleum Corporation describes the payment as made towards a residential premises. The Municipal Corporation of Grater Bombay levied municipal taxes on the ground that this is a residential property. The Secretary, Housing and Special Assistance Department, Govt. of Maharashtra, Mantralaya, Bombay vide proceeding No. REV-1091/(5053)/X III dated12th March, 1992 has held as follows : In support of this claim the above structure is residential, the Petitioner produced a letter from the Bharat Petroleum Corporation Ltd. giving details of Trombay House , Juhu. The property has been described in detail and includes Dining Hall, Kitchen, Godown, Recreation lounge and Senior Administrative Officer s room on the ground Floor, and the Lecture Hall, Residential Rooms for participants on the First Floor. The second Floor has a Library and other rooms and a flat for the Chief Training Manager. The fact that the building is used as the training centre of Bharat Petroleum Corporation Ltd. and a flat is provided for the Traini ..... X X X X Extracts X X X X X X X X Extracts X X X X
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