TMI Blog2019 (12) TMI 1204X X X X Extracts X X X X X X X X Extracts X X X X ..... said provision is whether the assessee who received capital gains has invested in a residential house. Once it is demonstrated that the consideration received on transfer has been invested either in purchasing a residential house or in construction of a residential house even though the transactions are not complete in all respects and as required under the law, that would not disentitle the assessee from the said benefit. What is required to be seen is whether the assessee has invested the sale consideration proportionate to the deduction claimed u/s 54F of the Act in construction or purchase of new residential house within the period prescribed in the section. Accordingly, we set aside the order passed by Ld CIT(A) and restore the issue to the file of the AO for verifying the quantum of amount spent by the assessee before three years from the date of transfer of original asset and accordingly for examining the deduction claimed u/s 54F of the Act. - Decided in favour of assessee. - ITA No.393/Bang/2019 - - - Dated:- 20-12-2019 - Shri B.R Baskaran, Accountant Member And Shri Pavan Kumar Gadale, Judicial Member For the Appellant : Shri V Srinivasa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the following reasons: a) The assessee has not deposited the unutilized sale consideration in capital gains account scheme before the due date for filing the return of income for asst. year 2013- 14 as per sec. 54F(4) of the Act. b) The construction has not been completed within 3 years from the date of transfer of original asset. Accordingly the AO rejected the claim of deduction u/s 54F of the Act. 6. The CIT(A) confirmed the order of the AO with the following observations :- Ground 1,2,3 3.1 Claim: Deposit in the capital gain account should be on or before due date for filing of return u/s 139(4) and not u/s 139(1) - the exemption claimed u/s. 54F of the Act is allowable. Examination from Factual point of view: 9. The appellant has invested in a land of 8,305 sq. ft. for a consideration of ₹ 1.29 Crores. The AO has held that so called construction of the house there-on was claimed as an after-thought for winning exemption u/s. 54F of the Act. 10. In this respect the chronology of events is examined. I find that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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: 15. 1 find that section 54(2) is very clear that the due date applicable is the date for furnishing the return of income under sub-section (1) of section 139. There is no mention of section 139(4) in this section. 16. In this respect, Hon. Supreme Court in the case of Smt. Tarulata Shyarn v. CIT [1977) 108 ITR 345 (SC) has held that there is no scope for importing into the statute words which are not there. Such importation would be, not to construe, but to amend the statute. Even if there be a casus omissus, the defect can be remedied only by legislation and not by judicial interpretation. 17: Further, Hon. Supreme Court in the case of Keshavji Ravji Co. v. CIT 119901 49 Taxman 87 (SC) has held that as long as there is no ambiguity in the statutory language, resort to any interpretati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r has been placed before this Constitution Bench. 22. The Constitution Bench of Hon. Supreme Court of India in this case has held as under: To sum up, we answer the reference holding as under 1) Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. (2) When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the revenue. (3) The ratio in Sun Export case (supra) is not correct and all the decisions which took similar view as in Sun Export Case (supra) stands overruled. 23. 1 have examined the submissions made by the appellant. I find that in the judgements cited by the appellant various decisions of the Hon. Supreme Court of India have not been considered. 24. Therefore, by relying on the decision of the Constitution Bench of Hon. Supreme Court of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of transfer of original asset. In this regard, the Ld A.R placed his reliance on the decision rendered by Hon ble jurisdictional Karnataka High Court in the case of CIT vs. Sambandam Udaykumar (20120(345 ITR 389)(Kar), wherein the High Court has observed as under:- 11. Section 45 of the Act makes it very clear that any profits or gains arising from the transfer of a capital asset effected in the previous year shall, save or otherwise provided in sections 54, 54B, 54D, 54E, 54EA, 54EB, 54F, 54G and 54H is chargeable to income tax under the head 'capital gains' and shall be deemed to be income of the previous year in which the transfer took place. The aforesaid sections which form part of section 54 of the Act are cases where capital gain on transfer of capital asset not to be charged in those cases. Section 54F of the Act is a beneficial provision of promoting the construction of residential house. Therefore, the said provision has to be construed liberally for achieving the purpose for which it was incorporated in the statute. The intention of the Legislature was to encourage investments in the acquisition of a residential house and completion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11. However, to address the concern of Revenue for strict construction of beneficial provisions in the light of Dilip Kumar Co. (supra), we notice that the deduction under s.54F of the Act essentially depends upon the extent of utilization of the sale proceeds in the new asset. The benefits of Section 54F of the Act also stands denied where the assessee owns more than one residential house other than new asset on the date of transfer of the original asset. The object of Section 54F is to encourage an assessee to convert any of his long term assets into a residential house subject to the condition that assessee does not own more than one residential house other than the new residential house on the date of transfer of long term asset. The Section, thus, in essence, offers some incentives to a tax payer to change its unproductive assets into a residential house. The action of the assessee is thus in conformity with the object and purpose of Section 54F of the Act. To say that the assessee is entitled for deduction in respect of capital gains arising from sale of only one long term capital asset and conversion thereof in residential property would in effect seriously limit the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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