TMI Blog2018 (10) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... are almost identically worded as in section 54F(4) of the Act. Admittedly, in this case, the assessee has invested the amount for the purchase / construction of the house within the stipulated period as also observed above while deciding the first issue. The assessee has proved such investment during the assessment proceedings and, thus, the assessee has complied with the requirement of substantive provisions and, thus, is entitled to the claim of exemption u/s 54F of the Act. In view of this, we direct the Assessing officer to grant exemption to the assessee as permissible under the provisions of section 54 - Decided in favour of assessee - ITA No:-2692/Del/2018 - - - Dated:- 28-9-2018 - Shri N. K. Billaiya, Accountant Member For the Assessee : Sh. P. C. Yadav, Advocate For the Revenue : Shri Surender Pal, Sr. DR ORDER PER: N. K. BILLAIYA, AM This appeal by the assessee is preferred against the order of the Commissioner of Income Tax [Appeals]-13, New Delhi dated 28.02.2018 for Assessment Year 2013- 14. 2. The sum and substance of the grievance of the assessee is that the CIT(A) erred in sustaining the addition of ₹ 14,85,109/- on the ground t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. Assessee carried the matter before the CIT (A) but without any success. Drawn support from the decision of Hon ble Supreme Court in the case of Prakash Nath Khanna 266 ITR 1. The CIT(A) was of the opinion that due date mentioned in section 54 (2) of the Act would be the due date of return of income u/s 139 (1) or the date by which the assessee filed the return u/s 139 (4). 6. Before us the counsel for the assessee vehemently stated that the assessee had made substantial investment towards the purchase of new property and because builder could not complete the construction of the residential house, therefore, the claim of exemption cannot be denied as per CBDT Circular No.471 dated 15.10.1986 and 672 dated 16.12.1993. Per contra the DR strongly supported the findings of the CIT(A). The undisputed fact is that the assessee has made substantial investment towards the purchase of new residential house. The Assessing Officer himself has given exemption to the extent of ₹ 38.49 lacs as against the claim of ₹ 53.34 lacs. A similar issue arose before the coordinate bench in the case of Seema Sabharwal in ITA No.272/Chd/2017 relevant findings read as under :- 8. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hing 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 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 as set within the period specified in sub-section (1), then ,- (i) the amount not so utilised 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see that the assessee should put the amount of capital gains in an account in any such bank or institution specifically notified in this respect and that the return of the assessee should be accompanied by submitting a proof of such deposit, hence, sub section (2) is an enabling provision which governs the Act of the assessee, who intends to claim the benefit of the exemption provisions of section 54. S-he real purpose of the enabling provision is the compliance of the substantial provision of sub section (1) to section 54 of the Act. Sub section (2), in fact, regulates the procedure for the substantive rights of the exemption provisions u/s 54 of the Act. This enabling section, in our view, cannot abridge or modify the substantive rights given vide sub section (1) of section 54- of the Act, otherwise, the real purpose of substantive provision i.e. sub section (1) will got defeated. The primary goal of exemption provisions of section 54 is to promote housing. The procedural and enabling provisions of sub-section (2) thus cannot be strictly construed to impose strict limitations on the assessee and in default thereof to deny him the benefit of exemption provisions. In our view, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11. Though the Hon'ble High Court in relation to the issue of claim of exemption u/s 54F of the Act has held that what matters is the intention of the assessee to purchase / construct new house. The Hon'ble Karnataka High Court has held that if the intention is not to retain cash but to invest in construction or any purchase in property and if such investment is made within the period stipulated therein, than section 54F(4) is not at all attracted. We may clarify here that provisions of section 54(2) are almost identically worded as in section 54F(4) of the Act. Admittedly, in this case, the assessee has invested the amount for the purchase / construction of the house within the stipulated period as also observed above while deciding the first issue. The assessee has proved such investment during the assessment proceedings and, thus, the assessee has complied with the requirement of substantive provisions and, thus, is entitled to the claim of exemption u/s 54F of the Act. In view of this, we direct the Assessing officer to grant exemption to the assessee as permissible under the provisions of saeciton54 of the Act. 7. Respectfully following the findings of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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