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2012 (12) TMI 1054

ime 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. - Both the tax authorities have stated that the “agreement for construction” was signed on 04.07.2007. The assessee has filed a copy of the “Construction agreement” before us and the same is found to have been executed on 22-03-2006. Thus, there is an apparent contradiction between the observations made by the tax authorities and the document produced before us. In clause (1) of the agreement filed before us (page 3), it is stated that the developers agree to deliver the Schedule ‘B’ Apartment (flat bearing no. B-1- 2086) by the end of August 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. - This factual aspec .....

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t 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 years after that date constructed, a residential house (hereafter in this section referred to as the new asset), the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say,-…… (4) The amount of the net consideration which is not appropriated by the assessee towards the purchase of the new asset made within one year before the date on which the transfer of the original asset took place, or which is not utilized by him for the purchase or construction 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 .....

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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 in the following cases:- (a) CIT Vs. Rajesh Kumar Jalan (206 CTR 361)(Guwahati) (b) CIT Vs. Fatima Bai (32 DTR 243)(Kar) (c) CIT V Jagriti Agarwal (339 ITR 610)(P & H) (d) Nipun Mehrotra Vs. ACIT (110 ITD 523)(Bang.) (e) ACIT Vs. Sapna Dimri (ITA No.151/D/2012)(Delhi) However, in the instant case, there was no necessity to make investment in the Capital Gains Account scheme, since the entire sale proceeds had been invested in purchase of new house before the extended time limit, i.e. before 31.3.2007 (one year from the end of the assessment year). (e) Sec. 54F, being a beneficial provision, it should be interpreted liberally so as to achieve the intention of encouraging housing and to provide shelter for all. 6. The Ld CIT(A) accepted the contention that the purchase of flat from .....

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t 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 ₹ 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 is no dispute between the parties that the purchase of flat from a builder would fall in the category of Construction . Hence, in our view, following questions arise for our consideration:- (a) Whether the time limit for making deposit under capital gain account scheme is the one prescribed under sub-sec.(1) of sec. 139 or under subsec. (4) of sec. 139. (b) Whether the assessee can be treated as complied with the conditions prescribed u/s 54F of the Act for availing deduction under that section. 8. With regard to the first question, we feel it apposite to extract below the observations made by Hon ble Punjab and Haryana High Court in the case of CIT Vs. Ms. Jagriti Aggarwal (339 ITR 610):- 10 Having heard learned counsel for the parties, we are of the opinion that sub-s (4) of s. 139 of the .....

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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 purchase of flat by making advance payments from time to time to the builder of the apartment. According to the assessee, the registration of the property got delayed since she was residing abroad. In various case law relied upon by the assessee, it is clearly stated that the registration (required to be done under the Registration Act) is not material, in order to decide about the ownership of the property. However, it also clearly stated that the said relaxation is permissible, provided the assessee has obtained possession of the property by paying the substantial sale consideration. The Ld CIT(A) has also come to the very same conclusion. 10. However, in the Circular issued by CBDT (referred supra), it is clearly stated that the taking the delivery of possession is only a formality. Hence, the condition of taking poss .....

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