TMI Blog2016 (9) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... of a house before filing the return of income on 4th November, 1996 for extending the benefit of exemption under Section 54F of the Act. Therefore, in the present facts, the decision of the Gauhati High Court in Rajesh Kumar Jalan (supra) would not apply so as to hold that the appellant had complied with the Section 54F(4) of the Act. - Decided against assessee - INCOME TAX APPEAL NO. 545 OF 2002 - - - Dated:- 18-8-2016 - M.S. SANKLECHA A.K. MENON, JJ. Mr. B. M Chatterji, Senior Advocate a/w. Ms.Shilpa Goel, Mr.Ranit Basu and Mr. G.S.Pikale i/b. M/s.S.V.Pikale Co. for the Appellant. Mr. A. R. Malhotra a/w. Mr. N. A. Kazi for the Respondents. ORAL JUDGMENT (Per M. S. Sanklecha,J.):- 1 This appeal under Section 260A of the Income Tax Act, 1961 (for short 'the Act') challenges the order dated 17th May, 2002 passed by the Income Tax Appellate Tribunal (for short 'the Tribunal'). The impugned order relates to Assessment Year 1996-97. 2 This appeal was admitted on 25th August, 2004 on the following substantial questions of law : (a) Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was justifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id record the fact that the appellant had obtained possession of the new flat on 27th January, 1997. However, the order of the Assessing Officer dated 13th March, 2001 was not disturbed. (h) Being aggrieved the appellant carried the issue in further appeal to the Tribunal. By the impugned order, the Tribunal on an analysis of Section 54F(4) of the Act, came to the conclusion that the appellant had only utilized ₹ 35,00,000/- of the net consideration received on sale of land towards purchase of a flat before the due date of filing the return of income. Further, the balance of the net consideration had not been deposited in the specified bank account as mandated by Section 54F(4) of the Act. Thus dismissing the appeal of the appellant-assessee. 4 It is in the backdrop of the above facts that the two substantial questions of law arise for our consideration: 5 Regarding Question No.1:- (a) No submissions were made specifically by the appellant in support of the question raised herein i.e. applicability of Section 54F(4) of the Act to the present controversy. In fact it is an agreed position between Counsel for the parties that Section 54F(4) of the Act applies t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Mr.Malhotra learned Counsel for the revenue in response submits as under : (i) On plain interpretation of Section 54F(4) of the Act the petitioner has not utilized the entire net consideration taxable under the head Capital Gains for purchase of the flat. Nor had the appellant deposited the balance unutilized consideration in a specified bank account as notified in terms of Section 54F(4) of the Act. Therefore, the assessee is not entitled to the benefit of exemption from Capital Gains under Section 54F of the Act, to the extent the mandate of Section 54F(4) of the Act, is not satisfied; (ii) The decision of this Court in Mrs.Hilla J.B.Wadia (Supra) as well as the Circulars dated 15th October, 1986 and 16th December, 1993 issued by the Central Board of Direct Taxes would have no application to the present facts. This in view of the fact that neither the decisions rendered nor the Circular were issued in the context of Section 54F(4) of the Act as it was not in the Act, at the relevant time; (iii) The word appropriation towards purchase of the new flat used in Section 54F(4)of the Act only covers cases where the flat has already been purchased within one year before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et 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 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 utilized in accordance with, any scheme which the Central Government may, by notification in the Official Gazette, frame in this behalf and such return shall be accompanied by proof of such deposit; and for the purposes of sub-Section(1), the amount, if any, already utilized by the assessee for the purchase or construction of the new asset together with the amount so deposited shall be deemed to be the cost of the new asset : Provided that if the amount deposited under this sub-Section is not utilized wholly or party for the purchase or co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the date of sale of the Capital Asset and the assessee had not utilized the amount within the prescribed period provided in Section 54F of the Act. This would lead to Assessment orders being rectified by appropriate orders,to determine the availability of benefit of exemption under Section 54F of the Act. (g) This led to the introduction of sub-section (4) to Section 54F of the Act by the Finance Act, 1987 with effect from 1st April, 1988. Besides introducing sub-section (4) to Section 54F the Finance Act, 1978, also amended Sub Section (1) of Section 54F of the Act to make it subject to provision of sub-section (4) thereof. (h) As we are concerned with Assessment Year 1996- 97, it is the amended provision which applies. Therefore, now Section 54F(1) of the Act which grants exemption from Capital gain tax where a flat is purchased either within one year prior to the sale of capital asset or within 2 years after the date of sale of the capital asset or where a residential house is constructed within 3 years from the date of sale of the capital asset, is now subject to the provisions of Section 54F(4) of the Act. Thus, where the consideration received on sale of capita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .Therefore, on plain interpretation of Section 54F of the Act, it appears that the impugned order of the Tribunal cannot be faulted. (j) However, the aforesaid view would be subject to the result of our examination of the submissions and case laws relied upon by Mr.Chatterji in support of the appeal to urge a view contrary to the plain meaning of Section 54F of the Act. (k) Reliance placed by the Appellant upon the decision of this Court in Mrs.Hilla J. B.Wadia (supra) to contend that the issue stands concluded in favour of the appellant-assessee is not acceptable. This for the reason that the only issue for consideration before the Court in the above case was the interpretation of Section 54 of the Act. In the above case the assessee had sold her residential property and invested a substantial amount in a Society for construction of a residential flat in the building to be constructed. The assessee therein had paid substantial amounts to the society and also acquired domain over the flat within a period of 2 years from the date of the sale of her house. At that point of time i.e. for the Assessment Year 1973-74 there was no requirement of depositing any un-utilized amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts in the above case are similar to the one in Mrs. Hilla J. B. Wadia (supra) and for the same reasons, will not govern the present dispute. In fact, the issue stood covered by the Circular dated 15th October, 1986 as the property purchased therein was of the Delhi Development Authority. Thus, the above decision has no application to the present facts. (n) Mr.Chatterji, learned Senior Counsel appearing for the appellant assessee then contended on the basis of the two Circulars dated 15th October, 1986 and 16th December, 1993 of the Central Board of Direct Taxes that once an allotment letter has been issued to the assessee, then it follows that the title of the constructed house has passed on to the assessee. Therefore the payment made subsequent to allotment letter in installments would not in any manner affect the assessee having satisfied Section 54F(1) of the Act. This submission ignores the fact that Sub Section (1) of Section 54F has been made subject to Sub Section (4) of the Act. The requirement under Section 54F(4) of the Act is the deposit of the unutilized amount in the specified bank account till it is utilized. This requirement has not been done away w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecisions of the other High Court we are unable to accept the same, we are not bound to follow/accept the interpretation of the other High Courts leading to a particular conclusion. In this case we find that the decision of the Karnataka High Court in K.Ramchandra Rao (supra) was rendered sub-silentio i.e. no argument was made with regard to the requirement of deposit in notified bank account in terms of Section 54F(4) of the Act before the due date as provided in Section 139(1) of the Act. As observed in Salmond's Jurisprudence 12th Edition : The rule that a precedent sub silentio is not authoritative goes back at least to 1661(m) when Counsel said : 'An hundred precedents subsilentio are not material'; and Twisden J agreed : 'precedents sub-silentio and without argument are of no moment'. This rule has ever since been followed. (q) In fact this Court in Commissioner of Income Tax vs. Thana Electricity Supply Ltd. 206 ITR 727 has observed that a decision of one High Court is not binding as a precedent on another High Court unlike a decision of the Apex Court. In support, reliance was placed in the above order upon the decision of the Apex court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pradesh [1999] 8 SCC 667 has observed as under :- The intention of the Legislature in a taxation statute is to be gathered from the language of the provisions particularly where the language is plain and unambiguous. In a taxing Act it is not possible to assume any intention or governing purpose of the statute more than what is stated in the plain language. It is not the economic results sought to be obtained by making the provision which is relevant in interpreting a fiscal statute. Equally impermissible is an interpretation which does not follow from the plain, unambiguous language of the statute. Words cannot be added to or substituted so as to give a meaning to the statute which will serve the spirit and intention of the Legislature..... (emphasis supplied) Similarly this Court in Thana Electricity (Supra) had observed as under : If the provision of a taxing statute can be reasonably interpreted in two ways, that interpretation which is favourable to the assessee has got to be accepted. This is a well-accepted view of law. It is the satisfaction of the court interpreting the law that the language of the taxing statute is ambiguous or reasonably capable of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opriation (purchase prior to sale of capital asset) and utilization (purchase/construction after the sale of capital asset). Therefore the word appropriated would have no application in cases of purchase / construction of a house after the sale of capital asset with which we are concerned. (v) Lastly and in the alternative, it is submitted by Mr.Chatterji, that as the entire amount has been paid to the developer/builder before the last date to file the return of Income under Section 139 of the Act, the exemption is available to the appellant under section 54F(4) of the Act. In support, the decision of Gauhati High Court in Rajesh Kumar Jalan (Supra) is relied upon. The Gauhati High Court in the above case was concerned with the interpretation of Section 54 of the Act. It construed the provision of sub Section (2) of Section 54 of the Act which is identically worded to sub section (4) of Section 54F of the Act The Court in the aforesaid decision held that the requirement of depositing before the date of furnishing of return of Income under Section 139 of the Act has not to be restricted only to the date specified in Section 139(1) of the Act but would include all sub section ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
