TMI Blog2015 (6) TMI 720X X X X Extracts X X X X X X X X Extracts X X X X ..... e return was filed. The words "could not have been raised" must be construed liberally and not strictly. There may be several factors justifying the raising of a new plea in an appeal and each case must be considered on its own facts. In the instant case the assessee has already made a claim although under the wrong head. Therefore, we do not find any infirmity in the order of the Ld. CIT(A) allowing the claim of deduction u/s. 54F. Assessee is not the absolute owner of the property since he is a lessee and the lease is for a period of 999 years, we find this issue also stands decided in favour of the assessee by the decision of the Mumbai Bench of the Tribunal in the case of Mrs. Prema P. Shah (2005 (11) TMI 182 - ITAT BOMBAY-J) wherein held that the lease is valid for a period of 150 years, which is in perpetuity and as such, the assessee is as good as absolute owner of the property. In the instant case the lease is for a period of 999 years subject to renewal for further period of 999 years. Further, as per clause 26 of the lease agreement, the assessee enjoys all the rights, i.e. transfer, mortgage, sub-lease etc. Therefore, it cannot be said that the assessee is not the own ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt was paid to City Corporation Ltd., Pune during A.Y. 2007-08 and the assessee has claimed the entire amount as exempt u/s. 54. The AO observed that the assessee cannot claim deduction u/s. 54 as that section deals with the transfer of a capital asset being building or lands appurtenant thereto. If at all she should have claimed u/s. 54F which is for the transfer of any long term capital asset not being a residential house and the proceeds are invested in a residential house. The AO further observed that the assessee apparently booked a flat bearing No. 1001 in Tower-8 of Amanora Park Town, Hadapsar, Pune. The cost of the flat is ₹ 1,34,59,685/- and till 23-11-2009, an amount of ₹ 98,50,000/- has been paid. Possession of the said flat has not been given till date. He, therefore, held that even if the assessee is eligible, then also the deduction allowable will not be the entire investment but as calculated as per provisions of Sec. 54F of the Act. 2.2 The Assessing Officer further noted that the assessee has transferred the shares on 19-10-2006. Therefore, the assessee has to purchase a house one year before or two years after the date of transaction i.e. the purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... correct Section. There is no estoppel against law, which would prevent the assessee claiming the deduction, which the assessee is otherwise eligible to claim. She can correct the mistake made at the time of filing of return during the assessment proceedings. For the above proposition the assessee relied on various decisions. 3.1 As regards the allegation of the Assessing Officer that the assessee is not entitled to deduction as she was not the owner of the property purchased but a lessee it was argued that the lease agreement entered into by her is for a period of 999 years which is extendable for a further period of 999 years on the same terms. Therefore, it is an agreement for the perpetual period. Further, according to the lease agreement, there is no bar on the transfer of property except for the payment of transfer charges of 1% to lessor. The lessee may transfer the property to any person within the time of lease. It was submitted that one time lease premium of ₹ 1,23,12,500/- is to be paid before the possession which is in the nature of the purchase consideration. It was argued that the characteristics and rights attached to property under the lease are similar to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which it was claimed that exemption u/s. 54F is allowable in respect of the total cost of the residential house acquired by the assessee of ₹ 1,24,65,625/- as against the amount of ₹ 30,78,228/- claimed by the assessee in the return filed. Without prejudice to the above it was submitted that the exemption u/s. 54F may be allowed in respect of the amount of ₹ 1,00,03,125/- paid within the period of three years form the date of transfer of the original asset. 5. Based on arguments advanced by the assessee the Ld. CIT(A) held that the assessee is entitled to claim deduction u/s. 54F to the extent of ₹ 1,00,03.125/- which is the amount the assessee has paid within the period of three years from the date of transfer of original cost. While doing so he observed that merely because the assessee has mentioned a wrong or incorrect Section in the return of income the same will not be a ground to deny the deduction to the assessee. 6. As regards the allegation of the AO that it is only a lease and not a purchase, the Ld.CIT(A) observed that the lease is for a period of 999 years and according to clause 26 of the lease agreement the assessee enjoys all the rights ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the return of income or revised return and no claim can be made other than these prescribed means 5. On the facts and in the circumstances of the case the Ld. Commissioner of Income-tax (Appeals) grossly erred in failing to consider that the assessee is only a lessee and not the owner of the flat and the deduction is allowable u/s 54F only to the owner and not a lessee. 6. The appellant craves leave to add, alter or amend any or all the grounds of appeal. 8. The Ld. Departmental Representative strongly supported the order of the Assessing Officer. Referring to the decision of the Hon'ble Kerala High in the case of CIT Vs. V.R. Desai reported in 197 Taxman 52 (Kerala) he submitted that the Hon'ble High Court in the said decision has held that the assessee was not entitled to exemption u/s. 54F because he has neither deposited the sale proceeds in the specified Bank Account in terms of Section 54F(4) before the due date of filing of return nor were the sale proceeds utilized for construction in terms of Section 54F(1). 9. The Ld. Counsel for the assessee on the other hand referred to the computation statement placed at Page 14 of the Paper Book and submitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n has held that Sub-section (4) of Section 139 of the Act is, in fact, a proviso to Sub-section (1) of Section 139 of the Act. Therefore, if a person has not furnished the return of the previous year within the time allowed under Sub-section (1), i.e. before the 31st day of July of the assessment year, the assessee can file his return of income before the expiry of one year from the end of the relevant assessment year. Therefore, such provision is not an independent provision, but relates to time contemplated under Sub-section (1) of Section 139. Therefore, the assessee can utilize the profits for purchase of residential properties or deposit in specified account before the due date of furnishing such return u/s. 139(4). 9.3 Referring to the decision of the Pune Bench of the Tribunal in the case of DCIT Vs. Ashok Deokishan Bhutada vide ITA No. 966/PN/2011 order dated 18-03-2013 for the A.Y. 2008-09 he submitted that the Tribunal following the aforementioned decision has held that the assessee has fulfilled the condition of investing the amount for acquiring the flat within the time limit for filing the belated return u/s. 139(4) and therefore is entitled to claim the deduction u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to which the assessee has paid an amount of ₹ 1,24,65,625/- towards the cost of residential house and therefore the claim u/s. 54F should be allowed to the assessee to this extent as against the amount of ₹ 30,78,228/- inadvertently claimed. Alternatively it was argued that the assessee has paid an amount of ₹ 1,00,03,125/- within the period of three years form the date of transfer of the original asset and therefore the same should be allowed as deduction u/s. 54F. We find the Ld. CIT(A) directed the Assessing Officer to allow claim of deduction u/s. 54F amounting to ₹ 1,00,03,125/- which the assessee has paid within the period of three years form the date of transfer of the original asset. He further observed that merely because the assessee has made a wrong claim u/s. 54 the same cannot be a ground to deny the benefit of deduction u/s. 54F to which the assessee is otherwise eligible. As regards the observation of the Assessing Officer that the assessee is only a lessee and the lease period is only 999 years and therefore, the assessee is not the owner of the house, he observed that the long period of lease of 999 years is as good as permanent. The nature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -lease etc. Therefore, it cannot be said that the assessee is not the owner of the property. 13. Now coming to the amount of deduction to be allowed u/s.54F of the Act, we find it is an admitted fact that the assessee has not deposited the sale proceeds in the specified bank account till 31-03-2009. The assessee only made payment of ₹ 55,40,625/- till 31-03-2009 towards purchase of flat. In the case decided by the Hon'ble Punjab and Haryana High Court in the case of MS. Jagrity Aggarwal (supra) the assessee sold her house property for ₹ 45 lakhs on January 13, 2006, and having purchased a new residential property on January 2, 2007, claimed deduction under section 54 of the Income-tax Act, 1961. The Assessing Officer declined the claim holding that the assessee failed to deposit the amount in the capital gains account scheme and also failed to purchase house property before the due date of filing the return of income. The Commissioner (Appeals) held that the assessee had purchased a new residential property on 2nd January, 2007, and the due date according to section 139(4) was March 31 2007, and, thus, the assessee had complied with the provisions of section 54 o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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