TMI Blog2017 (3) TMI 145X X X X Extracts X X X X X X X X Extracts X X X X ..... e of transfer and receives part payment after six months then it would lead to an impossible situation by asking assessee to invest money in specified asset before actual receipt of the same. We are of the view even on this basis the order of the CIT(A) deserves to be upheld. - Decided against revenue - ITA No.1987/Kol/2013 - - - Dated:- 1-3-2017 - Shri N.V.Vasudevan, JM and Shri Waseem Ahmed, AM For The Appellant: Shri R.S.Biswas, CIT For The Respondent: Shri Sunil Singhi, AR ORDER PER N.V.VASUDEVAN, JM: This is an appeal by the Revenue against the order dated 01.03.2013 of CIT(A)-VI, Kolkata relating to A.Y.2009-10. 2. Grounds of appeal raised by the revenue read as follows :- 1. Whether on the facts and circumstances of the case, Ld. CIT(A) erred in law in deleting the addition made by the A.O amounting to ₹ 10,00,00,000/- u/s 54G(2) of the IT Act,1961. 2. Whether on the facts and circumstances of the case, Ld. CIT(A) erred in allowing the deduction u/s 54G of the IT Act even when the deposit has not been made within the due time as provided in the Act. 3. That the appellant craves for leave to add, delete or modify any of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on to all or any of the purposes mentioned in clauses ( a ) to ( d ) (such cost and expenses being hereafter in this section referred to as the new asset), the difference between the amount of the capital gain and the cost of the new asset shall be charged under section 45 as the income of the previous year ; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its being purchased, acquired, constructed or transferred, as the case may be, the cost shall be nil ; or ( ii ) if the amount of the capital gain is equal to, or less than, the cost of the new asset, the capital gain shall not be charged under section 45 ; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its being purchased, acquired, constructed or transferred, as the case may be, the cost shall be reduced by the amount of the capital gain. Explanation. -In this sub-section, urban area means any such area within the limits of a municipal corporation or municipality as the Central Government may, having regard to the population, concentratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is no dispute that Long Term capital gain (LTCG) of ₹ 81,57,21,820 resulted on account of sale of the property at Bhandhup and the transfer of the capital asset had taken place during the previous year relevant to AY 2009-10. To claim exemption u/s.54G of the Act, the Assessee had to comply with the conditions laid down in Sec.54G(1) of the Act by spending the capital gain for the purposes set out in Sec.54G(1) of the Act. The Assessee has a time frame of three years after the date on which the transfer took place to comply with the conditions laid down in Sec.54G(1) of the Act. Section 54G(2) of the Act provides that if the Assessee is not in a position to spend the capital gain in the manner laid down in Sec.54G(1) of the Act on or before the due date for filing the return of income for the relevant AY in which the capital gain arose, he has to deposit the unutilized for all or any of the purposes mentioned in Sec.54G(1) of the Act, in an account in any such bank or institution as may be specified in, and utilised 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 accomp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 of the Act which includes both Sec.139(1) of the Act and Sec.139(5) of the Act. The second part of Sec.54G(2) however adds a rider that 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 . If the time limit laid down in the first part is taken into account viz., time limit u/s.139 of the Act which includes both Sec.139(1) 139(5) of the Act, than the deposit of ₹ 10 crores by the Assessee in the specified account was eligible for exemption u/s.54G of the Act because the time limit laid down in Sec.139(5) of the Act was 31.3.2011 and the deposit of ₹ 10 crores was made on 30.3.2010. If the time limit laid down in the second part is taken into account viz., Sec.139(1) of the Act which is 30.9.2009 in the present case, than the deposit of ₹ 10 crores by the Assessee in the specified account was not eligible for exemption u/s.54G of the Act as it was made beyond the time limit. 8. The Assessing Officer applied the second part of Sec.54G(2) and denied exemption u/s.54G of the Act to the Assessee to the extent of ₹ 10,00,00,000/-. Bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f acquisition of the property denoting transfer thereof the same should be considered to be sufficient compliance for the purpose of claiming exemption u/s. 54E of the Act. Hon 'ble High Court observed that a taxing statute or any other statute has to be construed reasonably and every effort should always be made to ascertain the intention of Parliament from the words employed and, as far as possible, an interpretation which leads to absurdity should be avoided. The Hon 'ble Court also observed that under the provisions of section 54E of the Act, what is to be invested in specified assets is the consideration or any part thereof' and unless the consideration is received, or accrues, there is no question of investing it. Reliance was also placed on the decision of Hon'ble Allahabad High Court in the case of CIT Vs. Janardhan Dass (late through legal heir Shyam Sunder) (2008) 299ITR 210 (All) wherein Hon 'ble High Court held that if the agricultural land is purchased within a period of two years from receipt of enhancement compensation, the capital gain or no capital gain, as the case may be, will be charged under section 54B(2) of the Act. 9. The Assessee als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2006-07 held that the investments of ₹ 12,50,000/- and ₹ 37,50,000/- made on 3.8.2007 and 27.10.2007 respectively having been made within six months of receipt of such consideration is allowed exemption from tax on capital gains. It observed as under:- 18. In our considered opinion, the interpretation placed by the CBDT in consultation with the Ministry of Law to the condition of making investment within six months from the date of transfer in section 54EC would support the claim of the assessee in this case also for exemption from capital gain with respect to the impugned sum of ₹ 50 lakhs invested in specified assets on 3.8.2007 and 27.10.2007. In the present case, admittedly the impugned amount of sale proceeds have been received by the assessee much after the date of transfer i. e. 12. 7.2005, so however, it is also emerging from the record that the investments of ₹ 12,50,000/- and ₹ 37,50,000/- made on 3.8.2007 and 27.10.2007 respectively have been made within six months of receipt of such consideration. Therefore, having regard to the interpretation placed by the CBDT to understand the requirement of making investment within six months from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s time limit for making investment upto the time limit for filing return of income u/s.139 of the Act which includes both Sec.139(1) of the Act and Sec.139(5) of the Act. The second part of Sec.54G(2) however adds a rider that 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 . If the time limit laid down in the first part is taken into account viz., time limit u/s.139 of the Act which includes both Sec.139(1) 139(5) of the Act, than the deposit of ₹ 10 crores by the Assessee in the specified account was eligible for exemption u/s.54G of the Act because the time limit laid down in Sec.139(5) of the Act was 31.3.2011 and the deposit of ₹ 10 crores was made on 30.3.2010. If the time limit laid down in the second part is taken into account viz., Sec.139(1) of the Act which is 30.9.2009 in the present case, than the deposit of ₹ 10 crores by the Assessee in the specified account was not eligible for exemption u/s.54G of the Act as it was made beyond the time limit. 12. The ld. DR relied on the order of the AO. The ld. Counsel for the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 accordance with, any scheme 37 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 utilised 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 : 14. The Hon ble Punjab Haryana High Court held Sec.139(4) which is akin to Sec.139(5) of the Act in the present case, was part of Sec.139(1) and therefore if deposit of unutilized capital gain is made within the time limit made in Sec.139(4) of the Act, the deduction cannot be denied to an Assessee. The following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or furnishing the return of income as per s. 139(1) of the Act is subject to the extended period provided under subs. (4) of s. 139 of the Act. 15. We are of the view that the ratio laid down by the Hon ble Punjab Harayana High Court will hold good in the context of a revised return filed u/s.139(5) of the Act as well. Hence the deposit made by the Assessee in the present case has to be held to be within the time limit specified in Sec.54G(2) of the Act and therefore the Assessee is entitled to exemption u/s.54G of the Act. Apart from the above, we are also of the view that decisions of ITAT Kolkata Bench 'A' in the case of Chanchal Kumar Sircar v. Income-tax Officer, Ward-32(1) and the ITAT Pune Bench 'A' in the case of Mahesh Nemichandra Ganeshwade v. Income-tax Officer (supra), supports the plea of the Assessee. It has been held in those decisions that period of six months for making deposit u/s. 54EC of the Act should be reckoned from the dates of actual receipt of the consideration, because if the assessee receives part payment as on the date of transfer and receives part payment after six months then it would lead to an impossible situation by asking ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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