TMI Blog2015 (5) TMI 580X X X X Extracts X X X X X X X X Extracts X X X X ..... Decided in favour of assessee. - I.T.A .No. 1325 /Del/2012 - - - Dated:- 17-4-2015 - Shri N.K. Saini And Shri I. C. Sudhir For the Appellant : Sh. Gaurav Dudeja, Sr. DR For the Respondent : Sh. Salil Agrawal, Adv, Sh. Sailesh Gupta, CA ORDER PER N. K. SAINI, AM This is an appeal by the Department against the order dated 20/12/2011 of the Ld. CIT(A) Faridabad. Following grounds has been raised in this appeal. 1. On the facts and in the circumstances of the case, the Ld. C1T(A) has erred on facts and in law in deleting the disallowance of ₹ 18, 00, 0001- made by the Assessing Officer on a/c of non utilization of capital gain before the due date of furnishing of the return i.e 31/7/2007. By this date neither assessee purchased the new agricultural land nor capital gain was deposited into capital gain account with a nationalized bank as was mandatory as per provisions of Section 54B(2) of the Income Tax Act, 1961. 2. On the facts and in the circumstances of the case, the Ld. CIT( A) has erred on facts and in law in appreciating the facts that the assessee not having complied with the conditions specified in Section 54B(2) of the Act, was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of ₹ 18 lakh u/s 54B of the Act on account of investment in agricultural land. The AO disallowed the claim of deduction u/s 54B amounting to ₹ 18 lakh on the ground that the amount of capital gain was not invested in capital gain account scheme as laid down u/s 54B (2) of the Act but only in FDRs, prior to purchase of agricultural land. 4. Being aggrieved the assessee carried the matter to the Ld. CIT(A) and submitted that the investment aggregating to ₹ 22,16,080/- had been made on 817/2008 and 2211112008 in purchase of agricultural land and thus entitling for a deduction u/s 54B of the Act. It was stated that apart from above the assessee also invested a sum of ₹ 5,05,968 in respect whereof, he was entitled for deduction u/s 54F of the Act. It was stated that the assessee invested ₹ 27,22,048 which amount exceeded the amount of capital gains of ₹ 26,97,829/-. 5. The Ld. CIT(A) after considering the submissions of the assesses deleted the disallowance made by the AO by observing that for allowability of deduction u/s 54B of the Act the assessee had contended that a new agricultural land was purchased before the due date of filing of ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 8. In his rival submissions, the Ld. Counsel for the assessee reiterated the submissions made before the authorities below and further submitted that the assesses utilized the sale proceeds of the agricultural land for purchase of the agricultural land within 2 years of the sale which was on 7112/2006. It was further submitted that the extended period of limitation of filing of return u/s 139 (4) of the Act was up to 31/3/2009. Therefore, the Ld. CIT(A) was justified in deleting the arbitrary addition made by the AO. 9. We have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it is an admitted fact that the assessee sold urban agricultural land situated at Palwal on 7112/2006 and claimed the deduction u/s 54B of the Act on account of investment made in agricultural land amounting to ₹ 18 lakh. The said investment was made on 8/7/2008 and 2211112008. To resolve the present controversy, it is necessary to discuss the provisions contained in Section 548 of the Act which read as under:- 54B. [(I)] [Subject to the provisions of sub-section (2). where the capital gain arises] from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the new asset : Provided that if the amount deposited under this sub-section is not utilised wholly or portly for the purchase of the new asset within the period specified in sub-section (I ), then. (i) the amount not so utilised shall he charged under section 45as the income of the previous year in which the period of two years from the date of the transfer of the original asset expires; and (ii) the assessee shall be entitled to withdraw such amount in accordance with the scheme aforesaid. 10. From the above provisions, it is clear that the deduction u/s 54B of the Act is available on the investment made within a period of 2 years after from the date of sale of agricultural land The said investment is required to be made for the purpose of land to be used for agricultural purposes. In the present case the assessee sold the urban. agricultural land on 7112/2006 and the investment was made for purchase of the agricultural land on 7/8/2008 and 22/1112008, so the investment made was within the period of 2 years from for the sale of land. Now question arises as to whether the assessee is entitled to claim the deduction even when the investment was made on a date beyond the da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r purchase of property before the extended due date uls 139(4). The contention of the revenue that the deposit in the scheme should have been made before the initial due date and not the extended due date is an untenable contention. 11.From the ratio laid down in the aforesaid referred to case, it is clear that the assessee can furnish the return of income at any time before the expiry of one year from the end of the relevant assessment year or before the completion of assessment whichever is earlier. In the present case, the assessment year assessment year 2007-08 which ends on 3118/2008 . Therefore, the period extended by one year end on to 31 st March 2009 and in the present case the assessee made the investment in the agricultural land before the extended due date for filing the return of income u/s139(4) of the Act i.e. 31/3/2009. Therefore, the Ld. CIT(A) was fully justified in directing the AO to allow the deduction u/s54B of the Act. We do not see any infirmity in the impugned order of the Ld. CIT(A) on this issue. 7. In the result, appeal of the Department is dismissed. The order is pronounced in the open court on 17th April 2015. - - TaxTMI - TMITax - Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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