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TMI Blog2012 (12) TMI 1054X X X X Extracts X X X X X X X X Extracts X X X X ..... eration is invested in purchase/construction of a house property. In case of purchase of house property, it should be purchased within one year before or two years after the date of transfer of the land. If it is a case of construction, the house should be constructed within three years from the date of transfer of land. Though the assessee booked a flat in the year 2005, it is stated that the document for conveyance of the undivided share of land was executed only on 06-07-2007. 3. The assessee computed long term capital on sale of land at Rs. 24,14,544/- and claimed the entire capital gain as exempt u/s 54F of the Act. The provisions of sub sec.(1) and sub. Sec.(4) of sec. 54F are relevant here and they read as under:- (1) Subject to the provisions of sub-section (4), where, in the case of an assessee, being an individual or a Hindu undivided family, the capital gain arises from the transfer of any long term capital asset, not being a residential house (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 year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the purposes of sec. 54 and 54F of the Income tax Act. (b) The assessee had already invested the entire sale consideration of Rs. 30.00 lakhs realized on sale of lane, in purchase of the new property within the permitted time as stated below:- (i) Payment made on 22.12.2005 Rs. 6.00 lakhs (ii) Payment made on 22.03.2006 Rs.28.00 lakhs Rs.34.00 lakhs (c) For determining the test of ownership, the provisions of Transfer of Property Act, Registration Act have no application. Hence the conveyance of undivided share of land on 06-07-2007 does not have any implication in this case. In this regard, the assessee relied upon following case law:- (i) CIT Vs. Podar Cements Ltd (226 ITR 625)(SC) (ii) CIT Vs. Mysore Minerals Ltd (239 ITR 775)(SC) (iii) CIT Vs. Ajitsingh Khajanchi (2008)(297 ITR 95)(MP) (iv) CIT Vs. Mrs. Shahzada Begum (173 ITR 397)(AP) (v) Balraj Vs. CIT (254 ITR 22)(Delhi) (vi) Smt. Shashi Varma Vs. CIT (224 ITR 106)(MP) (d) For considering the time limit for making investment in the "Capital gains Account Scheme" under sub-sec.4 of sec. 54F, the extended time limit prescribed u/s 139(4) can also be considered, as held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e money to the builder before the prescribed date cannot be termed as acquisition of flat since what was paid was only 'advance money' for an unwritten verbal contract which could have been easily broken as stated above. No valid irrevocable documentation conferring ownership existed for purchase of the said flat with the appellant. .....The appellant has not fulfilled the conditions laid down u/s 54F(4) also as the return of income was filed only after the receipt of notice u/s 148 on 9.1.2009 viz. after much of delay. 12. Therefore, in my view, the appellant failed to fulfill both the conditions of availing benefit of sec. 54F viz., the property was not purchased or constructed within the stipulated time provided in the Act and also the money was not deposited in the Capital Gain Deposit Account in time before the time allowed for filing a return u/s 139(1). Hence, on both counts, the appellant failed to convince and therefore, I do not find any reason to interfere in the order of the AO and sustain the addition of Rs. 24,14,554/-." Aggrieved by the order of Ld CIT(A), the assessee is in appeal before us. 7. We have heard the rival contentions and perused the record. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... end of the relevant asst. yr. 2007-08 (sic.-2006-07) i.e., 31st March 2007. Thus, sub-s. (4) of s. 139 provides extended period of limitation as an exception to sub-s. (1) of s. 139 of the Act. (4) is in relation to the time allowed to an assessee under sub-s. (1) to file return. Therefore, such provision is not an independent provision, but relates to time contemplated under sub-s. (1) of s. 139. Therefore, such sub-s. (4) has to be read along with sub-s.(1). Similar is the view taken by the Division bench of Karnataka and Gauhati High Courts in Fatima Bai and Rajesh Kumar Jalan cases (supra) respectively". By following the above cited decision, we hold that the time limit for the purpose of making investment in Capital Gains Account scheme may also be taken as the time limit prescribed u/s 139(4) of the Act. The assessment year under consideration, being assessment year 2005-06, the limitation would expire on 31.3.2007. The compliance of the provisions of sec. 54F (4) should be examined accordingly. 9. The next question is about the eligibility of the assessee to claim deduction u/s 54F of the Act. According to the assessee, she had invested the entire consideration in purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2006 (subject to clause (13)). If this fact is true, it is confusing as to how the tax authorities have mentioned the date of construction agreement as 04.7.2007. Both the parties did not offer any explanation about this contradiction. The assessee did not furnish a copy of conveyance deed dated 04.07.2007 also before us and hence we did not have the benefit of examining the same. 13. Hence, this factual aspect requires verification, even though it appears that it may not have any effect on the eligibility of deduction u/s 54F of the Act, in view of the view expressed by us in the preceding paragraph. However, the Tribunal, being a fact finding authority cannot allow the confusion to continue as it is. At the same time, in the interest of both the parties, it is imperative that this confusion is resolved. Besides the above, the tax authorities have also not examined the account statement, referred supra, on which, we have placed reliance. The conveyance deed also needs examination to confirm that the assessee has actually acquired the flat. 14. In view of the above, the facts prevailing in the instant case require examination at the end of AO. Accordingly, we set aside the order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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