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TMI Blog2015 (10) TMI 2045X X X X Extracts X X X X X X X X Extracts X X X X ..... limitation period 4. On the facts and in the circumstances of the case, the learned CIT(A's) erred in confirming the action of the Assessing Officer with regard to reopening of assessment as being barred by limitation. 5. It is, therefore, prayed that the order of CIT(A's) be set aside on the above point and exemption u/s.54F granted and returned income be restored. 2. Briefly stated facts are that the case of the assessee was reopened and the notice u/s.148 of the Income Tax Act,1961 (hereinafter referred to as "the Act") was issued to the assessee on 27/03/2012 and served upon assessee on 28/03/2012. In response to the notice, the assessee filed return of income on 30/04/2012 received by the Assessing Officer (AO in short) on 01/05/2012. Subsequently, the AO framed assessment u/s.143(3) r.w.s. 147 of the Act vide order dated 30/03/2013; thereby the AO made addition of Rs. 28,07,078/- on account of Long Term Capital Gain (LTCG) as discussed in para-2 of assessment order, addition on account of unexplained investment in mutual funds of Rs. 2,40,000/- and addition towards undisclosed interest income of Rs. 2,882/-. Against the said assessment order, the assessee carried the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h act of the AO was confirmed by the ld.CIT(A). The ld.counsel for the assessee submitted that the assessee had sold office for Rs. 36 lacs on 08/01/2008. And had invested Rs. 1,06,00,000/- in residential property on 05/10/2009. The authorities below have grossly erred in not giving the benefit of section 54F of the Act. In support of the contention, ld.counsel for the assessee placed reliance on various case-laws enclosed with the paperbook of the assessee (at page Nos.3 to 19); including the judgement of Hon'ble High Court of Punjab and Haryana in the case of CIT vs. Jagtar Singh Chawla reported at (2013) 87 DTR 0217:: (2013 215 Taxman 0154 and the judgement of Hon'ble High Court of Karnataka in the case of CIT vs. K.Ramachandra Rao reported at (2015) 56 taxmann.com 163 (Karnataka). 5.1. On the contrary, ld.Sr.DR Shri Narendra Singh vehemently argued that it is not the case where the assessee himself has disclosed the transaction. He submitted that the AO has rightly denied the claim of deduction u/s.54F of the Act. 6. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below as well as the case-law relied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on : For the purposes of this section,- [* * * *] [* *] "net consideration", in relation to the transfer of a capital asset, means the full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer. (2) Where the assessee purchases, within the period of [two years] after the date of the transfer of the original asset, or constructs, within the period of three years after such date, any residential house, the income from which is chargeable under the head "Income from house property" , other than the new asset, the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of such new asset as provided in clause (a), or, as the case may be, clause (b), of sub-section (1), shall be deemed to be income chargeable under the head "Capital gains" relating to long-term capital assets of the previous year in which such residential house is purchased or constructed. (3) Where the new asset is transferred within a period of three years from the date of its purchase or, as the case may be, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall be entitled to withdraw the unutilised amount in accordance with the scheme aforesaid. 6.1. A combined reading of section 54F(1) and 54F(4) of the Act, it is evident that the assessee would be entitled for exemption/deduction u/s.54F of the Act in the event he purchases new asset within one year from the date of transfer of original asset or the amount is utilized before the date of furnishing the return u/s.139 of the Act. In a case it is not utilized for the purpose of aforesaid and the period aforementioned section 54F(4) mandates the assessee to deposit such amount before due date of filing of return u/s.139(1) of the Act. Therefore, there is no ambiguity in the provision so far deposit of the unutilized amount is concerned, it has to be deposited in a specified capital gain account before the due date of filing of return u/d.193(1) of the Act. The question which is required to be examined whether the assessee has utilized the amount before the time limit prescribed for such purpose or if not whether the amount was deposited in the manner prescribed u/s.54F(4) In the present case, the undisputed facts are that the original asset was transferred on and the new asset was pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of assessee i.e. when the assessee had invested the entire sale consideration in construction of a residential house within the three years from the date of transfer. Could he be denied exemption under section 54 F on the ground that he did not deposit the said amount in capital gain account scheme before the due date prescribed u/s.139(1) of the Act. The Hon'ble High Court of Karnataka High Court held as under:- "As it clear from Sub-section (4) in the event of the assessee not investing the capital gains either in purchasing the residential house or in constructing a residential house within the period stipulated in Section 54F(1), if the assessee wants the benefit of Section 54F, then he should deposit the said capital gains in an account which is duly notified by the Central Government. In other words if he want of claim exemption from payment of income tax by retaining the cash, then the said amount is to be invested in the said account. If the intention is not to retain cash but to invest in construction or any purchase of the property and if such investment is made within the period stipulated therein, then Section 54F(4) is not at all attracted and therefore the contention ..... X X X X Extracts X X X X X X X X Extracts X X X X
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