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2015 (5) TMI 580 - ITAT DELHI

2015 (5) TMI 580 - ITAT DELHI - TMI - Disallowance of deduction u/s 54B - non utilization of capital gain before the due date of furnishing of the return - investment in the agricultural land - CIT(A) deleted the disallowance - assessee sold urban agricultural land and claimed the deduction u/s 54B on account of investment made in agricultural land - Held 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 .....

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the Act. We do not see any infirmity in the impugned order of the Ld. CIT(A) on this issue. See CIT Vs. Rajesh Kumar Jalan [2006 (8) TMI 126 - GAUHATI High Court] - 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 th .....

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tionalized 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 not entitled for exemption and the exemption has been rightly denied by the assessing Officer. The reliance may be placed on the decision of Hon 'ble Delhi .....

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ich consequently stood utilized for specified purpose' is not a relevant criterion to decide-the eligibility of the assessee for exemption having regard to the clear provisions of aaww. 4. "That the appellant craves for the permission to add, delete or amend the grounds of appeal before or at the time of hearing of appeal. " 2.From the above grounds, it is gathered that only grievance of the Department relates to the deletion of disallowance of ₹ 18 lakh made by the AO on acc .....

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red in the original return and the capital gain was claimed exempt u/s 54B of the Act. Later on the case was selected for scrutiny. During the course of assessment proceedings the AO noted that the assessee sold urban agricultural land situated at Palwal on 7112/2006 for a consideration of ₹ 30 lakhs and worked out the long term capital gain at ₹ 26,97,829/- after reducing indexed cost of acquisition of ₹ 3,41 ,070/-. Against the said long term capital gain assessee claimed ded .....

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t 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 d .....

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instead of a scheme specified u/s 54B (2) of the Act constituted only a technical breach and the deduction should be allowed by applying a liberal interpretation since those provisions are in the nature of beneficiary provisions. The reliance was placed on the following case laws:- (i) Motilal Padampt Sugar Mills Co. Ltd. VS State of Uttar Pradesh & Ors 118 ITR 326 (S C) (ii) CIT VS Rajesh Kumar Jalan (2006)286 ITR 274 (Gau) (iii) Shri Jagtar Singh Chawla VS ACIT in ITA NO. 49231Del12010 ord .....

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vestment in new asset is made even before the time prescribed u/s 139(4) and the return is filed belatedly, the claim of deduction shall be allowable. He also observed that the investment in agricultural land had been made on 8/7/2008 and 22111/2008 within the period of 2 years from the date of sale of original asset. Therefore, the assessee was entitled to claim deduction u/s 54B of the Act. Now, the Department is in appeal. 7. The Ld. DR reiterated the observations made by the AO in the assess .....

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r stated that the extended period u/s 139 (4) ofthe Act was available upto 3113/2008 but the assessee purchased the agricultural land beyond the extended period on 8/7/2008 & 2211112008. Therefore, the AO rightly denied the deduction u/s 54B of the Act and the Ld, CIT(A) was not justified in deleting the addition made by the AO. 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 ut .....

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, 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 cap .....

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harged to income-tax as income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section, that is to say, (i) if the amount of the capital gain is greater than the cost of the land so purchased (hereinafter 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 45as the income of the previous) 'ear; and for the purpose of c .....

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t 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 1397in an account in an)' such hank or institution as may be speci .....

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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 av .....

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er the assessee is entitled to claim the deduction even when the investment was made on a date beyond the date of furnishing the return of income u/s 139(1) of the Act. In this regard the Hon'ble jurisdictional High Court in the case of CrT VS. Jagtaar Singh Chawla (2013) ... 215 Taxman 154 observed in para 9 and 10 as under:- 9. A Division Bench of the Gauhati High Court in a case reported as CIT Vs. Rajesh Kumar Jalan [2006J 286ITR 274/157 Taxman 398, held that only Section 139 of the Act .....

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ection 139 of the Income-tax Act, 1961, is mentioned in Section 54(2) in the context that the unutilized 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 uls 139 of the Income-tax Act. Section 139 of the Income-tax Act, 1961, cannot be meant only 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 .....

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