TMI Blog2018 (7) TMI 1640X X X X Extracts X X X X X X X X Extracts X X X X ..... tment in the residential building as prescribed u/s. 54F of the Act before the due date of filing of return of income u/s. 139(4) of the I.T. Act, i.e., 31/03/2007. Accordingly, this issue is remitted to the file of the Assessing Officer for fresh consideration after giving adequate opportunity of hearing to the assessee. The appeal of the Revenue is partly allowed for statistical purposes. - I.T.A. No.56/Coch/2017, C.O. No. 23/Coch/2017 (Arsg. out of I.T.A. No. 56/Coch/2017) - - - Dated:- 10-7-2018 - S/SHRI CHANDRA POOJARI , AM GEORGE GEORGE K., JM Revenue by Shri Dhanaraj A. Sr. DR Assessee by Ms. Gayathri Kamath J.,CA O R D E R Per BENCH: This appeal filed by the Revenue and the Cross Objection filed by the assessee are directed against the order of the CIT(A)-II, Kochi dated 14/12/2016 and pertains to the assessment year 2006-07. 2. The Revenue has raised the following grounds: 1) The CIT(A) erred in granting exemption u/s. 54 without considering the fact that the sale consideration was not deposited in the capital accounts scheme before due date of filing return. 2) The CIT(A) has not considered the conditions stipulated under the prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time limit specified u/s. 54F of the Act before the Assessing Officer. However, the Assessing Officer vide order dated 05/08/2010 rejected the contentions raised by the assessee u/s. 54F on the ground that the new residential property was not acquired within three years from the date of transfer and the assessee failed o deposit the amount in capita gains depost accounts scheme before the due date of filing return of income for the relevant assessment year. 5. On appeal, the CIT(A) observed that the main issue is whether the assessee had constructed a new residential house within three years from the date of transfer (i.e. 01/04/2005) or purchased before one year of transfer or two years after the date of transfer. The CIT(A) observed that the Assessing Officer s conclusion that the assessee acquired new residential property only on 22/01/2007, i.e., after two years from the date of transfer is factually incorrect. According to the CIT(A) 22/01/2007 is within 2 years from 01/04/2005. Since the assessee has purchased new property within two years of transfer, he has fulfilled the conditions laid down u/s. 54F. Thus, the CIT(A) deleted the addition of ₹ 15,28,925/-. 6. Ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rein the court has laid down the procedure the department needs to follow in case an appeal is filed where tax effect is below the monetary limit prescribed. The court has directed the department to clearly plead in the memo of appeal itself that the appeal falls under the exception; 7.2 Further, the Ld. AR submitted that clause 6 of the CBDT circular and Section 268A(2)of the Act clarifies that in the case the appeal is not filed merely on the ground of low tax effect there shall be no presumption that the department has acquiesced in the decision on the disputed issues. Given the fact that the tax effect is less than the monetary limit and that the department has not pleaded in the memorandum of appeal of any exception, it was requested to dismiss the appeal filed by revenue without going into the merits of the case. 7.3 The Ld. AR submitted 27 Cents of agricultural land belonging to Late K. Sasidharan, at Attipra Village, in Trivandrum was acquired by the State Government on 1.4.2005 for a compensation of ₹ 20,25,925 and the rteturn of income for AY 2006-07 was filed claiming the capital gains in respect of this land as exempt u/s 10(37). The assessee purchased 4 cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 415/Mds/2015 (dt. 22/04/2016) (g)) Pr. CIT vs. Shankar Lal Sahni (253 taxman 308)(Raj.) 8. We have heard the rival submissions and perused the material on record. The assessee sold the capital asset on 01/04/2005. Admittedly, the assessee filed the return of income on 18/07/2006 for the assessment year 2006-07. As per section 139(1) of the Act, the return of income for assessment year 2006-07 should have been filed on or before 31/07/2006. The assessee is said to have made investment in construction of new building on 22/01/2007. According to the Assessing Officer, the assessee should have made investment in the residential building before 31/07/2006. The Assessing Officer denied the exemption u/s.54F of the Act on the reason that the return filed within the extended time limit available of filing of return of income u/s. 139(4) cannot be considered. 8.1 The Karnataka High Court in the case of CIT vs. Fathima Bai (32 DTR 243), the Guwahati High Court in the case of CIT vs. Rajesh Kumar Jalan (206 CTR 361) held that the due date for the assessee to invest the amount of capital gains in purchase/construction of new residential asset or investment in capital gains scheme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be invested in the said account notified by the Central Government on this behalf. If the intention is not to retain cash but to invest in construction or any purchase of the property and if such investment is made within the period stipulated therein i.e., section 139(4), then section 54F(4) is not all attracted and therefore, the contention that the assessee has not deposited the amount in the bank account as stipulated and therefore, he is not entitled to the benefit even though he has invested the money in construction is also not correct. A similar view was taken by the Kerala High Court in the case of Dr. Xavier J. Pullikal vs. DCIT (104 DTR 134). In our opinion, the assessee could make investment in construction of new residential building within three years from the date of transfer of original asset to claim deduction u/s. 54F of the Act. Provisions of section 54F are beneficial provisions and are to be considered liberally. 8.4 In view of the above discussion, we are inclined to remit the issue to the file of the Assessing Officer to examine the fulfillment of the conditions u/s. 54F of the Act through intermediary period, i.e., from the date of transfer of the capital ..... X X X X Extracts X X X X X X X X Extracts X X X X
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