TMI Blog2016 (10) TMI 1119X X X X Extracts X X X X X X X X Extracts X X X X ..... l requirement to ensure that investment is made in a residential house as claimed in the return of income. Merely because of technical breach / non-compliance the benefit due to the assessee by the legislature cannot be denied particularly when there is substantive compliance made. Section 54 is a beneficial section and as held by Hon'ble Apex Court in the case of Bajaj Tempo Ltd. vs CIT (1992 (4) TMI 4 - SUPREME Court) the provisions of a beneficial section should be construed liberally. - Decided in favour of assessee. - ITA Nos. 1248 & 1249/Del/2013 - - - Dated:- 25-10-2016 - SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER For The Assessee : Sh. Amit Goel, Sh. Saurabh Goel, CAs For The Revenue : Sh. Amrit Lal, Sr. DR ORDER PER H.S. SIDHU, J.M. ORDER The Assessee has filed these two Appeals against the separate Orders dated 22.1.2013 and 10.1.2013 of the Ld. CIT(A)-XIII, New Delhi pertaining to assessment years 2007-08 2008-09 respectively. Since the issues involved in these appeals are common, therefore, the same are being consolidated by this common order for the sake of convenience. 2. The following grounds raised i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 9,50,000/- for Flat No.C-408. This fact was admitted by the assessee in its reply dated 07.12.2009 and admitted that amount of ₹ 9,50,000/- invested in C-408 was wrongly considered u/s 54 of the IT Act. Therefore, in the assessment order the Assessing Officer worked out the capital gain after indexation at ₹ 49,78,349/-and allowed deduction for the amount deposited of ₹ 35,00,000/- in capital gain account scheme and investment in Flat No. A-907 of ₹ 5,77,000/- and the balance amount of ₹ 9,01,349/- claimed u/s. 54 was added back as income of the assessee as this amount was paid for booking of second flat C-408 and assessment was completed at ₹ 13,91,750/- vide AO s order dated 21.12.2009 passed u/s. 143(3) of the I.T. Act, 1961. 5. Against the Order of the Ld. AO, assessee appealed before the Ld. CIT(A), who vide impugned order dated 22.1.2013 has dismissed the appeal of the assesseee. 6. Aggrieved with the aforesaid order of the Ld. CIT(A), Assessee is in appeal before the Tribunal. 7. Ld. Counsel for the assessee has stated that during the year the assessee has made payment of ₹ 15,27,000/- to the builder namely Ajay Enterprise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... officer has however reduce the deduction by ₹ 901349/- on the ground that:- a) Amount deposited in capital gain account was ₹ 35 Lacs and not ₹ 36 lacs. b) That the amount of ₹ 1527000/- claimed as investment in new house includes ₹ 950000/- in respect of other house other than the new house . 9.1 During the year the assessee has made payment of ₹ 1527000/- to the builder namely Ajay Enterprises Pvt. Ltd from whom the new house was purchased. Out of this amount of ₹ 1527000/- the builder has appropriated ₹ 950000/- toward another flat No. C-408 booked by the assessee with the builder. It should not be reason for making disallowance/addition. The fact of the matter is that the assessee has invested a total sum of ₹ 6174683/- in the eligible new house (A-907) upto 04/12/2008 i.e. well within the period specified under section 54 of Income Tax Act, 1961. The assessee being an old man of around 76 years could not keep track of the adjustment made by the builder. However, he made the substantive compliance of section 54 by making the required investment in the new house within the period specified uls 54 of Income Tax Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicable 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 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 : Provided that if the amount deposited under this sub-section is not utilised wholly or partly for the purchase or construction of the new asset within the period specified in sub-section (1), then,- i) The amount not so utilized shall be charged under section 45 as the income of the previous year in which the period of three years from the date of the transfer of the original asset expires; and ii) The assessee shall be entitled to withdraw such amount in accordance with the scheme aforesaid. 9.3 A bare reading of aforesaid provisions would reveal that for giving ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see. 9.8 We further note that assessee has not surrendered or offered the amount of ₹ 9,50,000/- for addition. Before the AO assessee has stated that the amount of ₹ 9.50 Lacs be not considered as investment uls 54. Even without considering this amount of ₹ 9.50 Lacs, the actual investment by the assessee in purchase of eligible new house within the specified period of 3 years was more than the amount of long term capital gain. 9.9. The Delhi Bench of ITAT in case of ITO V.Smt. Sapana Dimri (2012) 19 taxmann.com 15 (Delhi) in para 10 of its order held as under :- 10. Now, coming to second issue, the Hon'ble Punjab Haryana High Court in the case of Ms. Jagriti Aggarwal (supra) has held that sub-sec. (4) of sec. 139 provides the extension period of limitation as an exception to sub-sec.(1) of sec. 139 of the Act. Sub-sec. (4) was in relation to the time allowed to an assessee under sub-sec.( 1) to file the return. Therefore, such provision was not an independent provision, but relates to the time contemplated under sub-sec.(1) of sec. 139. Therefore, subsec.(4) has to be read along with sub-sec.). Therefore, the due date for furnishing the return of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so made a point that the due date of filing of the return of income uls 139(1) for the purpose of utilization of the amount for purchase/construction of residential house has to be construed with respect to the due date prescribed for filing of the return uls 139(4) of the Act. The point made by the assessee is supported by the judgment of the Hon'ble Punj and Haryana High Court in the case ofMsJagriti Aggarwal (supra).In this case, the Hon'ble High Court observed that section 139(4) provides the extended period of limitation as an exception to the period provided uls 139(1). Therefore, the Hon'ble High Court held that the provision of section 139(4) is not an independent provision but is related to the time contemplated under the provisions of section 139(1) of the Act. Accordingly, the Hon'ble High Court held that sub-section (4) to section 139 had to be read alongwith sub-section (1) and the due date for furnishing the return of income uls 139(1) is subject to the extended period provided ills 139(4) and hence the extended period uls 139(4) has to be considered for the purposes of utilization of the capital gain amount. In that case, the assessee had sold the old ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r sub-section (4) of section 139, he could fulfill requirement under section 54 for exemption of capital gain from being charged to income-tax on sale of property used for residence up to 30-3- 1998 - Whether assessee was entitled to claim benefit under section 54 on entire amount of capital gains - Held, yes 10. In the background of the aforesaid discussions and respectfully following the precedents, as aforesaid, we delete the addition of ₹ 9,01,349/- and allow the exemption u/s. 54 of the I.T. Act, 1961 as claimed by the assessee. 11. As regards the ITA No. 1249/Del/2013 (AY 2008-09) is concerned. The brief facts of this case are that the return of income was filed on 19.02.2009 declaring total income at ₹ 4,41,740/-. The return was processed uls 143(1) of the IT Act. The case was reopened u/s. 147 of the IT Act by recording reasons as per order sheet entry dated 21.05.2010 and notice uls 148 was issued on the same date. During the course of assessment for A.Y. 2007-08 it was noticed by the Assessing Officer that assessee has claimed exemption uls 54 in respect of two flats namely A-907 and C-408 with M/s Ajay Enterprises Ltd. The assessee had deposited a sum o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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