TMI Blog2018 (6) TMI 1740X X X X Extracts X X X X X X X X Extracts X X X X ..... urn of income U/s 139 of the Act then the amount of capital gain is required to be deposited in the capital gain account scheme before the date of filing of return and latest by the due date of filing of return U/s 139(1). Following the decision of Hon ble Punjab and Haryana High Court in case of CIT vs. Ms. Jagrity Agarwal [ 2011 (10) TMI 279 - PUNJAB AND HARYANA HIGH COURT ], decision of Hon ble Gauhati High Court in case of CIT vs. Rajesh Kumar Jalan [ 2006 (8) TMI 126 - GAUHATI HIGH COURT ] as well as the decision of the Coordinate Bench of this Tribunal in case of Virendra Singh vs. ITO [ 2016 (3) TMI 823 - ITAT JAIPUR ], we hold that when the assessee has acquired the new asset being residential house before the due date of filing the return of income U/s 139(4) of the Act then the substantial condition of acquiring the new asset within the stipulated period of 2 year /3 years from the date of transfer of the existing asset has been complied with and accordingly, the assessee is eligible for deduction U/s 54 - Appeal of the assessee is allowed. - ITA No. 825/JP/2016 - - - Dated:- 20-6-2018 - SHRI VIJAY PAL RAO, JM AND SHRI BHAGCHAND, AM For the Assessee : Shri Man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nefit U/s 54 of the Act. In support of his contention, he has relied upon the following decisions as under:- CIT vs. Ms. Jagrity Agarwal 339 ITR 610 (Punjab Haryana High Court) CIT vs. Rajesh Kumar Jalan 286 ITR 274 (Gauhati High Court). Shri Virendra Singh vs. ITO order dated 17.02.2016 in ITA No. 909/JP/2014. Thus, the ld. AR has submitted that the Hon ble High Court as well as the Tribunal has taken that view that the time period for utilizing the capital gain in acquiring the new asset shall be taken as the due date of filing the income U/s 139(4) of the Act and therefore, the return filed belatedly U/s 139(4) of the Act was accepted for the purpose of unitization of capital gain in acquisition of new asset eligible for deduction U/s 54 of the Act. 4. On the other hand, the ld. DR has relied upon the order of the authorities below and submitted that as per sub-section (2) of section 54 of the Act the time period for acquiring the capital gain as well as the amount to be deposited in the capital gain scheme is specifically provided as the date of return of income filed U/s 139 and not later than the due date of filing the return of income U/s 139(1) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstruction, as the case may be, the cost shall be nil; or (ii) if the amount of the capital gain is equal to or less than the cost of the new asset, the capital gain shall not be charged under section 45; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase or construction, as the case may be, the cost shall be reduced by the amount of the capital gain. 59[***] 60[(2) The amount of the capital gain which is not appropriated by the assessee towards the purchase of the new asset made within one year before the date on which the transfer of the original asset took place, or which is not utilised61 by him for the purchase or construction of the new asset before the date of furnishing 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 scheme62 which the Cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earlier; Provided that where the return relates to a previous year relevant to the assessment year commencing on the 1st day of April 1988, or any earlier assessment year, the reference to one year aforesaid shall be construed 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-Section (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 been taken place on 13.1.2006, falling in the previous year 2006-2007, the return could be filed before the end of relevant assessment year 2007- 2008 i.e. 31.3.2007. Thus, Sub-Section (4) of Section 139 provides extended period of limitation as an exception to Sub- Section (1) of Section 139 of the Act. Sub-Section (4) is in relation to the time allowed to an assessee under Sub-Section (1) to file return. Therefore, such provision is not an independent provision, but relates to time contemplated under Sub-Section (1) of Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where the asseessee utilises the capital gains towards purchase of the new asset within a period of two years from the date of transfer of the original asset but at the same time, doesn t file the return of income under section 139(1) but files the return belatedly under section 139(4) within a period of two years from the close of the financial year, would the provisions of section 54B(2) be applicable and the assessee required to comply with its provisions in order to be eligible for deduction under section 54B of the Act. As we have stated above, the provisions of section 54B(2) doesn t dilute this initial condition as specified in section 54B(1) and continues to provide that in order to be eligible for deduction, the utilisation of capital gains should be within the period of two years from the date of transfer of the original asset and where the same is not fulfilled, the capital gains will be brought to tax in the year in which the period of two years expires. In the instant case, it is not disputed that the conditions of section 54B(1) are fulfilled i.e, utilisation of capital gains is within a period of two years from the date of transfer of the original asset. At the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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