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Smt. Uma Vijay Versus The ITO, Ward- 6 (3) , Jaipur

Deduction u/s 54F - whether the sales consideration invested in Capital Gain Account within the period allowed u/s 139 (4) should also be considered to be within the period allowed u/s 139(1) of the Act? - Held that:- The assessee is entitled for deduction u/s 54F in respect of the sales consideration utilised within the extended time of filing of return of income u/s 139(4) of the Act, for purchase/construction of new residential house and for investment in Capital Gain Account. It appears from .....

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/- arising from the capital assets transferred during the relevant previous year. Hence the addition of ₹ 1,01,44,025/- made to returned income is deleted. Thus the appeal of the assessee is allowed. - ITA No. 827/JP/2015 - Dated:- 4-7-2016 - SHRI BHAGCHAND, AM & SHRI LALIET KUMAR, JM For The Assessee : Shri Anil Kumar Sharma, CA For The Revenue : Shri R.A. Verma, Addl.CIT -DR ORDER PER BHAGCHAND, AM The assessee has filed an appeal against the order of the ld. CIT(A)-II, Jaipur dated .....

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erm capital gain. 2.1 Brief facts of the case are that the assessee filed her return of income on 14-02-2013 for the assessment year 2012-13 declaring her total income of ₹ 2,53,050/-. The case of the assessee was processed u/s 143(1) (a) of the Act, 1961. The case of the assessee was selected for scrutiny and notice u/s 143(2) of the Act was issued on 08-08-2013. The ld. AR of the assessee attended the proceedings and submitted the details before the AO. The AO observed that the assessee .....

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at 1, Anand Bhawan Gruh Nirman Sahkari Samiti, Tagore Nagar Yogana, Jaipur on 23-01-2012 for a consideration of ₹ 1.50 crores. The AO observed that further deduction u/s 54F had been claimed by the assessee for purchase of property at Ansal Heights, 86, Village Nawada, Fatehpur, Gurgaon and for purchase of this property the assessee has made agreement on 15-10-2012 with Ansal Housing & Construction, New Delhi. The assessee has thus worked out capital gain as under:- (a) Full value of s .....

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rn was 31-07-2012. The AO further perused the details filed by the assessee and noticed that the assessee has not deposited the sale consideration in capital gain account before the due date of filing of income tax return. The AO vide letter No. 1714 dated 26-12-2014 asked the assessee as under:- During the year under consideration, you have sold a property situated at 1, Anand Bhawan, Gruh Nirman Sahkari Samiti, Tagore Nagar Yojna, Jaipur on consideration of ₹ 1.50 crores on 23-01-2012. Y .....

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l asset took place, or which is not utilised 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 case of the assessee for furnishing the return of income under sub-section (1) of section 139] in an account in any such bank or institution as may be specified in, and utilised in accordan .....

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e consideration of ₹ 1.50 crores in capital gain account scheme before the due date of furnishing of return u/s 139 (1) i.e. 31-07- 2012. The AO observed that the assessee has indicated that she has opened the capital gain account in SBI, Bajaj Nagar, Jaipur bearing No. 32145102874 but the AO noticed that no such amount received on account of sale of property was deposited before 31-07-2012. The AO show caused the assessee as to why her claim u/s 54F may not be disallowed as she has made a .....

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ase of the new asset before the due date of furnishing the return of income u/s 139 shall be deposited in capital gain account scheme and 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 139. The due date of filing of return of income under sub-section (1) of Section 139 was 31-07-2012. The AO observed that the assessee had sold the residential plot on 23-01- 2012 and got re .....

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condition laid down in the Act for the assessee is claiming deduction. The AO further observed that the assessee has invested only of ₹ 43,61,799/- for purchase of residential property for claiming deduction u/s 54F before due date of filing of return under sub-section (1) of Section 139 i.e. 31-07-2012. The AO observed that considering the facts of the case and submission filed by the ld. AR of the assessee, deduction u/s 54F is allowable for investment of ₹ 43,61,799/- only. The AO .....

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, the assessee carried the matter before the ld. CIT(A) who upheld the order of the AO by observing as under: 3.3 I have perused the facts of the case, the assessment order and the submissions of the appellant. The assessee during the relevant year has shown Long term capital gain of ₹ 1,43,03,205/- and claimed exemption u/s 54F of the I.T. Act, 1961 of ₹ 1,42,03,205/-. The assessee sold a residential property on 23-01-2012 while agreement for purchase of a new flat has been made on .....

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e date of filing of return for the relevant year u/s 139(5) of the I.T. Act, 1961. The contention of the assessee is that since the entire amount of ₹ 1,06,60,000/- had been deposited before the due date of filing of return u/s 139(4), the deduction u/s 54F of the I.T. Act, 1961 should be allowed on the entire amount. The AO on the other hand has restricted the allowance to amounts deposited/utilized before the due date for filing of return u/s 139 (1) of the I.T. Act, 1961. The ld. AR has .....

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hase 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 utilised 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 case of the assessee for furnishing the return of income under sub-section (1) of section 139] .....

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asset. ….. …… In view of the decision of the Apex Court in the case of P.N. Khanna vs. CIT (2004) 266 ITR 1 / 135 Taxman 327, and the decision of the Hon'ble Tribunal which has relied on this decision, the due date as specified in the Section 139 of the I.T. Act, 1961 has to be as per 139(1) and not 139(4) of the I.T. Act, 1961. The second plea taken by the assessee is that the consideration was received by the assessee later and after the due date for filing the return .....

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the amounts to be invested would be in relation to this net consideration. In view of the discussion above and the cases relied on including the decision of Apex Court, it is held that the amounts eligible for deduction u/s 54F of the I.T. Act, 1961 are those deposited before the filing of the return as per Section 139(1) and only those can be allowed. Thus the deduction u/s 54F of the I.T. Act, 1961 is allowed an amount of ₹ 43,61,799/- only. The order of the AO on this issue is upheld. 2 .....

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4500000/- was received vide post dated cheques pertaining to the period beyond the due date prescribed u/s 139(1), as follows: (PB No.23) S.No. Cheque No. Date Amount 1. 562405 30.11.2012 5000000/- 2. 562406 30.11.2012 5000000/- 3. 562407 30.11.2012 4500000/- Total 14500000/- Out of the same the cheque No.562407 of ₹ 450000/-(PB No.32) was replaced by three another cheques which were realised on different dates in the S.B Account No.677701024886 of ICICI Bank, as follows: (PB No.36-39) S.N .....

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.2013 2500000/- 41 2. RTGS 01.01.2013 2500000/- 41 TOTAL 5000000/- and balance of ₹ 5000000/- was received/realised in SB Account of the assessee with ICICI Bank as follows: :(PB No.36-39) S.No. Cheque No. Date of realization Amount PB No. 3. RTGS 03.01.2013 2000000/- 38 4. 906856 10.01.2013 1500000/- 38 5. 906855 14.01.2013 1500000/- 38 TOTAL 5000000/-the amount received/realised in SB Account of ICICI Bank was transferred to SBI Capital Gain Account as follows: (PB No.40-42) Date Amount .....

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ncome as prescribed u/s 139(1) of IT Act 1961. - the assessee has deposited unutilised sales consideration of ₹ 10660000/- in capital gain account as and when received from the buyer and before filing her return of income on 14.02.2013.(PB No.40-42) 8. As accepted by the AO the assessee has utilised the sale consideration of ₹ 4361799/- on or before the due date prescribed u/s 139(1), for making payments to M/s Ansal Housing & Construction Ltd. for construction of new residential .....

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4361799/- 9. The unutilised sales consideration of ₹ 10660000/- has been deposited in Capital Gain Account before filing relevant return of income with in the period prescribed u/s 139(4) of IT Act 1961, for making subsequent payments to M/s Ansal Housing & Construction Ltd. as per terms and conditions of the agreement. 10. The relevant facts on the basis of above said details and relevant return of income may be summarised as follows: Particulars Description Date of Transfer 23.01.201 .....

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considering the relevant issue in the case of CIT v. Jagriti Agrwal 339 ITR 610, following the judgment of Hon. Karnataka High Court in the case of Fatima Bai v. ITO, 32 DTR 243, and of Gauhati High Court in the case of CIT v. Rajesh Kumar Jalan, 266 ITR 274, has held that due date for furnishing of return of income as per section 139(1) is subject to extended period provided u/s 139(4) and thus justified the deduction claimed by the assessee u/s 54 of IT Act, even in case of investment made aft .....

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ollowing the Judgement of Hon. Punjab & Haryana High Court in the case of CITv. Jagriti Agrwal, and that of Hon. Gauhati High Court in the case of CIT v. Rajesh Kumar Jalan(supra) and it s own judgement in the case of Kishore Galiya v. ITO, 137 ITD 229, has decided the identical issue in favour of the assessee. (Copy of Judgment annexed). 14. Even when there is conflicting view of the Hon. Cochin Bench of ITAT as relied by ld. CIT(A) the view favorable to the assessee should be adopted as he .....

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materials available on record. It is observed that assessee has sold a property situated situated at 1, Anand Bhawan Gruh Nirman Sahkari Samiti, Tagore Nagar Yojana Jaipur on 23.01.2012, for a consideration of ₹ 1,50,00,000/-. The assessee computed a capital Gain of ₹ 1,43,03,205/- and claimed deduction of the same u/s 54F of I.T. Act, 1961 for utilising the sales consideration for the purpose of acquiring new residential House. Thus the assessee filed her return of Income on 14.02.2 .....

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filing of return of income u/s 139(1) i.e. ₹ 50,00,000/- on 01.01.2013 , ₹ 49,00,000/- on 22.01.2013 and ₹ 7,60,000/- on 12.02.2013. Therefore the AO allowed proportionate deduction u/s 54F to the extent of ₹ 41,59,180/- only (14303205*4361799/1,50,00,000/-) against that of ₹ 1,43,03,205/-claimed by the assessee and disallowed balance of ₹ 1,01,44,025/- which has been upheld by the ld. CIT(A). There is no disputes with respect to the facts that the assessee ha .....

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emo of the Bank, bank Statement of the assessee and statement of Capital Gain Account placed on PB page No. 23, 28 to 32, 36 to 38 and 40 to 42 and explained that the sales consideration was received vide post dated cheques dated 30.11.2012 and cheques of ₹ 1,00,00,000/- were returned unpaid even on that date and ultimately could realised the same on different dates between 01.01.2013 to 14.01.2013 vide different cheques/RTGS. Therefore it was not possible for the assessee to deposit the s .....

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nt before filing of return of income within the period allowed u/s 139(4) should be considered to have been deposited before the due date of filing of return of income prescribed u/s 139(1) of the Act. Now the issue for our consideration is that whether the sales consideration invested in Capital Gain Account within the period allowed u/s 139 (4) should also be considered to be within the period allowed u/s 139(1) of the Act. We find that the above said issue is covered within the decision of Ho .....

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, it is 31st day of July of the Assessment Year in terms of clause (c) of the Explanation 2 to Sub-Section 1 of Section 139 of the Act, whereas Sub-Section (4) of Section 139 provides for extension in period of due date in certain circumstances. It reads as under: "(4) Any person who has not furnished a return within the time allowed to him under Sub-Section (1), or within the time allowed under a notice issued under Sub-Section (1) of Section 142, may furnish the return for any previous ye .....

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d show that if a person has not furnished the return of the previous year within the time allowed under Sub-Section (1) i.e. before 31st day of July of the Assessment Year, the assessee can file return before the expiry of one year from the end of the relevant Assessment Year. 12. The sale of the asset having been taken place on 13.1.2006, falling in the previous year 2006-2007, the return could be filed before the end of relevant assessment year 2007-2008 i.e. 31.3.2007. Thus, Sub-Section (4) o .....

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h Courts in Fathima Bai's case (supra) and Rajesh Kumar Jalan's case (supra) respectively. 13. In view of the above, we find that due date for furnishing the return of income as per Section 139(1) of the Act is subject to the extended period provided under Sub-Section (4) of Section 139 of the Act. ' The Coordinate Mumbai Bench of this Tribunal in the case of Anil Kumar Omkar Singh Aurora v. ITO, (ITA No.4648/Mum/2013 order dated 6-11-2013) following the decision of Hon ble P&H H .....

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R 610 (P&H), wherein, Their Lordships have held that provision of section 139(4) is not an independent provision, but is related to time contemplated under the provision of section 139(1) of the Act. Accordingly, section 139(4) had to be read along with sub-section (1) of section 139 and the due date for furnishing the return of income u/s 139(1) is subject to the extended period provided u/s 139(4). Hence, extended period u/s 139(4) has to be considered for the purpose of utilization of the .....

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