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TMI Blog2010 (12) TMI 217X X X X Extracts X X X X X X X X Extracts X X X X ..... n was claimed, was not a residential house; (c) The return of income was not filed u/s 139(1) but was filed u/s 139(4). 3. The AO made a further addition of Rs. 8,05,787 on the ground that the date of acquisition of the flat was4th Oct., 2002 and not6th Nov., 2000. Aggrieved, the assessee carried the matter in appeal. The first appellate authority rejected all the contentions of the assessee. Further aggrieved, the assessee is in appeal before us on the following grounds : "On the facts & the circumstances of the case, the Learned CIT(A) erred in: * Confirming the addition of Rs.95 Lakhs under the head long term capital gains on sale of Trombay House by denying the exemption u/s 54 of I.T. Act, 1961. * Confirming the addition of Rs. 8,05,787 under the head long term capital gains by taking the date of purchase of property as4-10-2002instead of6-11-2000. 4. The learned counsel for the assessee, Mr. Rajeev Waglay, submitted a paper book of 115 pages. On the issue of disallowance of Rs. 95 lakhs claimed u/s 54 of the Act, the learned counsel submitted that this was done on three grounds. On the first ground of disallowance, the learned counsel submitted that under section 54(2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or residential premises. He vehemently contended that Burma Shell, which has taken on lease the Trombay House, was using it as a residential training centre and the house was duly equipped with dining hall, kitchen, recreation lounge, residential rooms, as well as the flat for the Chief Training Manager and hence it is a residential property. He further submitted that the user of residential property by Burma Shell as a residential training centre, does not change the character of the residential property. For this proposition he relied on the following case laws : (i) CIT v. Purushottam Dass 247 ITR 516 (Del.). (ii) ITO v. Ms. Sandhya Saxena 7 SOT 527 (Mum.). (iii) Damodar Raheja v. ITO 10 ITD 75 (Mad.). 7. On the second issue, the learned counsel submitted that the agreement in question was registered with the Sub Registrar, Mumbai on6-11-2000 under Registration No. P-VDR-1/1919/2000. He submitted that a copy was taken of this registered document on4-10-2002 and the AO got confused and held that the date of obtaining a copy of the registered document is the date of acquisition. To prove his point, he took this Bench to various documents. On a query from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e following grounds : (i) The claim of exemption u/s 54 mandates that the return of income should be filed within the time stipulated u/s 139(1). (ii) The return of income should be accompanied by proof of deposit in the bank in the capital gains scheme. (iii) Section 54 is applicable only to a residential house, the income of which is chargeable under the head "Income from house property". 13. We would now consider the issue in seriatim. Section 54(1) and 54(2) reads as follows : "54. [1] [Subject to the provisions of sub-section (2), where, in the case capital gain arises from the transfer of a long-term capital asset, being buildings or lands appurtenant thereto, and being a residential house, the income of which is chargeable under the head "Income from house property" (hereafter in this section referred to as the original asset), and the assessee has within a period of [one year before or two years after the date on which the transfer took place purchased], or has within a period of three years after that date constructed, a residential house, then], instead of the capital gain being charged to income-tax as income of the previous year in which the transfer took place, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s within a period of one year before or two years after the date on which the transfer took place, purchased or within a period of three years constructed a residential house. In such a case quantification of the exemption u/s 54(1) is to be made as per (i) and (ii). 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 proof of deposit shall be filed along with the return of income. 14. A plain reading of the above clearly shows that the amount in question should be deposited in the specified bank account before the due date prescribed for furnishing the return of income u/s 139(1). There is no dispute on the fact that that the assessee has fulfilled this condition. There is no requirement that the assessee should file her return of income before the due date prescribed u/s 139(1). On the contrary it is suffice if the assessee furnished the return of income u/s 139. The Revenue in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an" something and that such a definition is explanatory and prima facie restrictive and that when the definition is declared to "include something" then the definition is extensive. 17. Both these decisions do not discuss the issue whether the requirement of attaching a document to the return of income is declaratory or mandatory. Similarly the Hon'ble Supreme Court in the case of IPCA Laboratory Ltd. 266 ITR 521, does not deal the issue whether a particular requirement in the statute should be considered declaratory or mandatory. 18. In view of the above discussion, we uphold the contention of the assessee that the requirement of attaching the proof of having deposited the amounts in the specified capital gain account, with the return of income, is directory and as the assessee has furnished all the details during the course of assessment, no disallowance u/s 54 can be made on this count. 19. The last ground is whether the property in question is a residential house. Factually for the assessment year 1997-98 Mr. Coelhi Peter Gasper has declared Rs.14,818 as income from house property in the return of income. In the last WILL and testament, the Trombay House is referred to as a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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