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TMI Blog2011 (3) TMI 1738X X X X Extracts X X X X X X X X Extracts X X X X ..... sited the same in any account under 'Capital Gains Account Scheme'. 2. Short facts apropos are that assessee had returned in his return for the impugned assessment year, long term capital gain at ₹ 56,33,678/-. In a re-assessment proceeding initiated under Section 147 of the Act, Assessing Officer substituted the fair market value as on 1.4.1981 with ₹ 50,000/- per acre, against ₹ 2.75 lakhs per acre shown by the assessee, which resulted in such long term capital gains getting enhanced to ₹ 82,69,305/-. It seems there was no objection from the assessee on this aspect. Assessee had claimed deduction under Section 54EC of the Act for a sum of ₹ 57 lakhs invested in bonds of NABARD and this was accepted b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Scheme', assessee submitted that it was at part with an account opened under 'Capital Gains Account Scheme'. As per the assessee, it had not violated the mandate of the Scheme which was to ensure that funds deposited therein was utilized only for the purpose of construction or purchase of residential house. According to assessee, it had constructed a new residential house within the time frame of three years and therefore, deduction under Section 54F which was a beneficial provision ought to have been granted to him. Though the A.O. refused accede to these arguments, Ld. CIT(Appeals) on appeal of the assessee was appreciative. According to him, intention of introducing Section 54F in the Act was to encourage construction of res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 54F of the Act, the deduction stipulated thereunder could not be denied, where assessee had satisfied the ultimate object of the section by investing in a residential house within the time frame allowed. 6. In reply, the learned D.R. submitted that decision relied on by the learned A.R. in the case of Shri Madhuvan Prasad (supra) was earlier to the decision rendered in the case of Mrs. C.M. Vijayakumari (supra) relied on by him. Therefore, according to him, in view of the decision of Hon'ble Delhi High Court in the case of Bhika Ram & Others v. Union of India reported in 238 ITR 113, the latter decision has to be followed by this Tribunal, since there were two contradictory views of the co-ordinate Bench. 7. We have peru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntention of the legislature in introducing Section 54F in the Act, was of the opinion that just because assessee had failed to deposit the unutilized sums in the specified account, he could not be denied deduction under Section 54F of the Act if other aspects were satisfied. No doubt, learned D.R. strongly relied on the decision of this Tribunal in the case of Mrs. C.M. Vijayakumari (supra) where it was held at para 4 as under:- "4. We have considered the rival submissions and perused the materials available on record. Section 54F is a beneficial provision wherein the capital gain on transfer of capital assets are not to be charged in case of investment in the residential house. It is an admitted fact that the assessee has not complied wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f such a deposit could not have been envisaged by it since enhancement in capital gains arose out of a re-assessment proceeding. Despite this, assessee had deposited such sums in a Savings Bank account and there is no case for the Revenue that assessee withdrew the sum for any other purpose than construction of a house. Assessee though it had deposited only in an ordinary Savings Bank account, having made withdrawals therefrom only for the purpose of construction of a house, there was substantial compliance to the procedures. Just because the account was not nomenclatured as an account under Capital Gains Account Scheme, assessee could not have been denied deduction under Section 54F of the Act when he had satisfied all other conditions. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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