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TMI Blog2021 (12) TMI 506X X X X Extracts X X X X X X X X Extracts X X X X ..... eal with delay of 64 days. We are convinced with the reasons given as above in the application for condonation of delay and accordingly condone the delay in filing appeal. 3. The assessee is an individual. She sold two pieces of industrial land 05.05.2014 for a consideration of 4,70,00,000/-. The first piece was sold for a consideration of Rs. 1,70,00,000/- and the second piece was sold for Rs. 3,00,00,000/- but the valuation in terms of section 50C of the Income-tax Act, 1961 (hereinafter called 'the Act') of the second piece of land was Rs. 3.4 Crores. The assessee computed long term capital gain as follows: Sale Consideration Rs. 5,10,00,000/- Less: Indexed Cost of Acquisition Rs. 13,62,480/- Gross Total income Rs. 4,96,37,520/- Less : Deduction u/s.54F Rs. 2,43,32,118/- Taxable Capital Gains Rs. 2,53,05,402/- 4. The case of the assessee was selected for limited scrutiny to examine the correctness of deduction claimed u/s.54F of the Act, and statutory notices were issued to the assessee calling for details and the same were furnished from time to time. In course of the assessment proceedings, the assessee produced the details called for and thereupon, the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this section, that is to say,- ............ (2)... (3).... (4) The amount of the net consideration 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 utilised 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 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 am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expired. 8. As per the provisions of Sec.54F(4) of the Act, if the long term capital gain is not invested in purchase or construction of residential house then net consideration which is not appropriated by the assessee towards 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 scheme which the Central Government may, by notification in the Official Gazette, frame in this behalf. According to the AO, the Assessee did not deposit the net consideration or unutilized consideration into a capital gain accounts scheme. The AO therefore denied the benefit of deduction to the Assessee u/s.54F of the Act, even on this ground. 9. Aggrieved by the order of the AO denying the benefit of deduction u/s.54F of the Act, the assessee preferred appeal before CIT(A). In so far as the first reason s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in scheme account, the CIT(A) agreed with the submission of the Assessee and directed AO to allow deduction u/s.54F of the Act proportionate to the extent the net consideration has been invested in the capital gain scheme account. He also directed the AO to verify the utilization of the funds from the capital gain scheme account and take action in the year in which the period for utilization ends, if the assessee does not utilize the funds as required by law. In this regard the provisions of proviso to Sec.54F(4) provides that if the amount deposited under this sub-section is not utilized wholly or partly for the purchase or construction of the new asset within the period specified in subsection (1), then to the extent of non utilization, capital gain will be charged to tax as income of the previous year in which the period of three years from the date of the transfer of the original asset expires. In this case, the AY 2018-19 will be the Assessment year in which the period of 3 years from the date of transfer which is 5.5.2014. 12. With regard to the plea of the assessee that reinvestment in a new residential flat by entering into agreement with the Developer on 09/05/2016 would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilisation of net consideration deposited in the capital gain scheme account can be considered only in Assessment Year 2018-19. We are therefore of the view that the directions given by the CIT(A) holding that the purchase of a new flat will not amount to putting up construction and therefore the benefit of deduction will not be available to the assessee is a finding which is not necessary to be given in the appeal for AY 2015-16. The question whether the acquisition of flat by the assessee would amount to construction or purchase, is a issue which ought to have been left open by the CIT(A) for consideration in AY 2018-19. We leave this issue open for decision in Assessment Year 2018- 19.
15. The learned DR, however submitted that directions may be given to the AO, to take appropriate remedial action in Assessment Year 2018-19. We are of the view that it would be just and appropriate to make an observation that the AO will take appropriate measures as is open to the Revenue in law. With these observations, we allow the appeal of the assessee.
16. In the result, appeal of the assessee is allowed.
Pronounced in the open court on the date mentioned on the caption page. X X X X Extracts X X X X X X X X Extracts X X X X
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