9911796707
TMI Blog2020 (11) TMI 308X X X X Extracts X X X X X X X X Extracts X X X X ..... d in holding that AO was correct in restricting the benefit of section 54B only to the investments made by the Appellant upto the date of filing of Income-tax return. All the above mentioned grounds are without prejudice and Independent of each other. That the appellant prays for leave to add, alter, amend and/or vary the ground(s) of appeal at or before the time of hearing. 2. Briefly stated facts of the case are that the assessee, an individual, filed return of income for the year under consideration on 29/09/2011, declaring income of Rs. 8,63,99,390/- and agriculture income of Rs. 9,51,286/-. The return of income filed by the assessee was selected for scrutiny assessment and statutory notices were issued and complied with. In the scrutiny assessment completed on 30/03/2014 under section 143(3) of the Income-tax Act, 1961 (in short 'the Act'), the learned Assessing Officer made certain additions/disallowances. On further appeal, the Ld. CIT(A) partly allowed the appeal of the assessee. Aggrieved, the assessee is in appeal before the Income-tax Appellate Tribunal (in short 'the Tribunal') raising the grounds as reproduced above. 3. Before us, the parties appeared through Vid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A) concluded, the legal requirement for eligibility of deduction under section 54 of the Act as under: "6.17 Keeping in view the aforesaid case laws and circular, the legal position that emerges is that an assessee would be eligible for deduction u/s 54 on unutilized portion of capital gains only if he satisfies the following two conditions:- 1. The unutilized portion is deposited in a an account in a specified bank or institution before actually furnishing the return of income and such return of income is accompanied by the proof of such deposit ( Reference : Hon'ble Kerala High Court decision in the case of CIT, Cochin V/s V.R. Desai (Supra)). 2. Such deposits being made not later not later than the extended date as applicable in the case of assessee for furnishing the income u/s 139(4) (Reference: The Hon'ble Punjab & Haryana Court decisions in the case of Suit. .Jugriti Aggnrwal (Supra) and Sh. Jagtar Singh Chawla (Supra). Thus the benefit of utilizing the capital gains upto the extended date as provided u/s 139(4) or depositing the unutilized part of capital gains in an account in a specified hank or institution upto the extended date as provided u/s 139(4) would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riculture land till the extended date of filing of the return of income as provided under section 139(4) of the Act. 5.6 On the other hand, the Learned DR relied on the order of the lower authorities and submitted that in view of the decision of the Hon'ble Supreme Court in the case of the Prakash Nath Khanna Vs CIT (2004) 266 ITR 1, the due date of the filing of the return of income should be under section 139(1) of the Act and not under section 139(4) of the Act. 5.7 We have heard rival submission of the parties and perused the relevant material on record. We find that the Ld. CIT(A) in the case of Vijay Choudhary (supra) has discussed the decision of the Hon'ble Supreme Court in the case of Prakash Nath Khanna(supra) and decision of the Hon'ble Punjab and Haryana High Court in the case of Jagriti Agrawal (supra). The Ld. CIT(A) himself has admitted that decision of the Hon'ble Supreme Court in the case of Prakash Nath Khanna (supra) is not with regard to the provision of section 54 of the Act. In the impugned order, Ld. CIT(A) has reproduced the relevant part of his decision in the case of Vijay Choudhary, which is reproduced as under: "6.15 However, keeping in view the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... strued as a reference to two years from the end of the relevant assessment year." 11. A reading of the aforesaid sub-section would show that if a person has not furnished the return of the previous year within the time allowed under sub-s. (1) i.e., before 31st day of July of the assessment year, the assessee can file return before the expiry of one year from the end of the relevant assessment year. 12. The sale of the asset having taken place on 13th Jan., 2006, falling in the previous (sic-assessment) year 2006-07, the return could be filed before the end of relevant asst. yr. 2007-08 (sic- 2006-07) i.e. 31st March, 2007. Thus, sub-s. (4) of s. 139 provides extended period of limitation as an exception to sub-s. (1) of s. 139 of the Act. Sub-s. (4) is in relation to the time allowed to an assessee under sub-s. (1) to file return. Therefore, such provision is not an independent provision, but relates to time contemplated under sub-s. (1) of s. 139. Therefore, such sub-s. (4) has to be read along with sub-s. (1). Similar is the view taken by the Division Bench of Karnataka and Gauhati High Courts in Fatima Bai and Rajesh Kumar Jalan cases (supra) respectively. 13. In view of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the return of income prescribed under section 139(4) of the Act i.e. 31/03/2014 is allowable for considering deduction under section 54F of the Act. Respectfully, following the above decisions, we accordingly direct the Assessing Officer to consider amount utilized by the assessee for purchase of the house till 31/03/2014(which includes the payment of Rs. 50,36,422/- made up to 31/07/2012) for deduction under section 54F of the Act." 5.11 Further, the Ld. CIT(A) in the instant case has relied on his decision in the case of Vijay Choudhary(supra). The tribunal in the case of Vijay Choudhary(supra), reversed the decision of the Ld. CIT(A) observing as under: "7. We have heard both the parties and perused all the material available on record. The Hon'ble Karnataka High Court in case of Shri K Ramchandra Rao (supra) held as under: "3............ 2) Whether the assessee invests the entire sales consideration in construction of a residential house within three years from the date of transfer can he be denied exemption under Section 54F on the ground that he did not deposit the said amount in capital gains account scheme before the due date prescribed under Section 139(1) of the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we feel appropriate to set aside the finding of the Ld. CIT(A) and restore the issue in dispute of deduction under section 54B of the Act to the file of the Learned Assessing Officer for verifying the investment in purchase of agriculture land and decide the issue of deduction u/s 54B of the Act afresh in accordance with law after providing adequate opportunity of being heard to the assessee. As per the record, we find that against the order of the Learned CIT(A), the Revenue is not in appeal, which means the Revenue has accepted the decision of the Ld CIT(A). In view of this factual position, the Learned Assessing Officer is further directed that he shall not withdraw the deduction already granted by learned CIT(A) and not put the assessee in a position worse than the position after the impugned order of the Learned CIT(A). The ground No. 3 of the appeal of the assessee is accordingly allowed for the statistical purposes. 6. The ground No. 3 relates to disallowance of Rs. 17,28,000/-on account of fencing and commission expenses. We have heard rival submission of the parties on the issue in dispute. We find that the assessee claimed expenditure of Rs. 9,00,000/- and Rs. 8,28,000/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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