TMI Blog2022 (9) TMI 1089X X X X Extracts X X X X X X X X Extracts X X X X ..... 39 of the Act. In the case of CIT v Rajesh Kumar Jalan [ 2006 (8) TMI 126 - GAUHATI HIGH COURT] on similar facts held that assessee is eligible for claiming deduction under section 54F of the Act in case of HV investment property section 139(4) of the Act. The Delhi Tribunal in the case of Smt. Harinder Kaur [ 2021 (2) TMI 580 - ITAT DELHI] held that where assessee paid amount of sale consideration received from sale of a residential house for purchase of another residential property prior to due date of filing of return of income under section 139(4), his claim for exemption under section 54 was to be allowed - Appeal of assessee allowed. Allowability of deduction of renovation and brokerage expenses claimed as deduction by way of cost of improvement from sale of consideration - HELD THAT:- As on the basis of supporting evidences furnished before us, we are of the view that the assessee has been able to substantiate that he had expenses in connection with renovation/brokerage expenses. Accordingly, we are hereby allowing the assessee s ground of appeal in relation to allowability of renovation and commission expenses by way of deduction as cost of improvement from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endorsing addition of an amount of Rs. 10,23,392/- without accepting the claim of renovation and brokerage expenses of Rs. 2,86,500/-. The addition needs deletion. 5. The Ld. CIT(A) has erred in law and facts in confirming the income at Rs. 11,21,230/- as against return income of Rs. 97,838/- and there by endorsing addition of an amount of Rs. 10,23,392/- without giving reasonable time to furnish the objections of the assessee to rebut the same. The addition needs deletion. 6. The Ld. CIT(A) has erred in law and facts in confirming the income at Rs. 11,21,230/- as against return income of Rs. 97,838/- and there by endorsing addition of an amount of Rs. 10,23,392/- without referring the matter to the AVO . The addition needs deletion. 7. The Ld. CIT(A) has erred in law and facts in confirming the income at Rs. 11,21,230/- as against return income of Rs. 97,838/- and there by endorsing addition of an amount of Rs. 10,23,392/- without referring the matter U/s. 144A to the JCIT, tough requested by the assessee. The assessment needs annulment. 8. Taking into consideration the legal, statutory, factual, accounting and administrative aspects, no addition amounting to R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acquired jointly with daughter in law before the end of time allowed u/s 139(4) for furnishing the return of income and hence he should be allowed proportionate deduction u/s 54 in view of judgement of Punjab Haryana High Court in case of Jagtar Singh Chawla 259 CTR 388 (P H). The assessee has placed reliance of decision of ITAT Mumbai in case of ITO Vs. Deenaz Hoshang Jhabvala ITA No.5062(Mum) of 2012 (order date 15/01/2014) wherein reliance has been placed on decisions of Jagruti Agarwal 339 ITR 610(P H), Rajeshkumar Jalan 286 ITR 274 (Gauhati) and fatimabai (2010) 32(I)ITCL 97 (Karnataka-HC) Wherein it was held inter-alia that the assessee can fulfill the requirement of Section 54 of Act up to the extended time limit for furnishing the return of income u/s 139(4) of the Act. In this regard I find that the Mumbai High Court, recently in case of Humayun Suleman Merchant Vs. CCIT in IT. No. 545 of 2002 vide order dated 18/08/2016 having considered above cited judgments of Gauhati High Court as well as the High Court, has held as under:- (i) On the basis of the above broad analysis, we shall now examine the facts of the present case. The sale of capital asset took ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f her house. At that point of time i.e. for the Assessment Year 1973-74 there was no requirement of depositing any un-utilized amount in a specified bank account as now provided under Section 54(2) of the Act (similar to Section 54F(4) of the Act). Therefore the Court had no occasion to consider the provisions of Section 54(2) of the Act which is similar to Section 54F(4) of the Act, with which we are concerned. (l) Mr.Chatterji, then placed reliance on the observation of this Court in Mrs. Hilla J. B. Wadia (supra) that the Circular issued by the Central Board of Direct Taxes dated 15th October, 1986 in relation to construction of a home by Delhi Development Authority should also be extended to cities like Mumbai, as there is no control over the time taken by the developer / builder to construct the house and give possession of the same to the assessee. The Central Board of Direct Taxes Circular dated 15th October, 1986 was issued only in the context of Section 54 and 54(F) of the Act to clarify that an investment in a under the self finance scheme of Delhi Development Authority would be treated as construction for e purpose of capital gain, where an allotment letter has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilized amount in the specified bank account till it is utilized. This requirement has not been done away with in either of the above two Circulars dated 15th October, 1986 and 16th December, 1993 relied upon by the Appellant-Assessee. (o) Mr.Chatterji, learned Senior Counsel next submitted that in any case the issue now stands concluded in favour of the Appellant by the decision of the Karnataka High Court in K. Ramchandra Rao (supra) wherein an identical question came up for consideration and it was held that even where the assessee had not deposited the un-utilized Capital Gain in an account which was duly notified by the Central Government in terms of Section 54F(4) of the Act, the benefit of Section 54F(1) of the Act would still be' available. The Court held that if the intention was not to retain the capital gains but was to invest it in construction of property within the period stipulated in Sub Section (1) of Section 54(F) of the Act then Section 54F(4) of the Act is not at all attracted. We are with respect unable to accept the reasoning adopted by Karnataka High Court in K. Ramchandra Rao (supra). The mandate of Section 54F(4) of the Act is clear that amount whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n support, reliance-was placed in the above order upon the decision of the Apex court in Valliamma Champaka Pillai vs. Sivathanu Filial AIR 1137 1979 (SC) 1937 to hold that it is well settled that decision of one High Court is not a binding precedent upon another High Court and at best can only have persuasive value. However, at the cost of repetition we must emphasize that the decision of another High court rendered in the context of an all India Act would have persuasive value and normally to maintain uniformity and certainty we would adopt the view of the other High Court. However, with the greatest respect, we find that the decision of Karnataka High Court in K.Ramchandra Rao (supra) has been rendered sub-silentio. Therefore, we cannot place any reliance upon it to conclude the issue on the basis of that decision. (r) It was next contented by Mr.Chatterji, that liberal / beneficial construction should be given to the provision of Section 54F of the Act as its object was to encourage the housing sector which would result in the benefit being extended to the appellant assessee. In support, reliance was placed upon the decision of Delhi High Court in Ravindra Kumar Arora (sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tute is ambiguous or reasonably capable of more meanings than one, which is material. If the court does not think so, the fact that two different views have been advanced by the parties and argued forcefully or that one such view which is favourable to the assessee has been accepted by some Tribunal or High Court, by itself will not be sufficient to attract the principle of beneficial interpretation . In the present facts the provision of Section 54F(4) of the Act are . very clear. There is no ambiguity. Thus, there is no occasion to apply liberal / beneficial construction while interpreting the Section as contended by the Appellant. (t) It was next contended by Mr. Chatterji, learned Senior Counsel for the appellant that the word appropriation used in Section 54F(4) of the Act would also apply in the present case where the capital asset has been sold and sale proceeds are earmarked to be invested in construction of house. A plain reading of Section 54F(4) of the Act militates against it. As pointed out by Mr. Malhotra, learned Counsel appearing for the revenue, Section 54F(4) of the Act deals with two classes of cases, one where purchase of new residential house is within a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act but would include all sub section of Section 139 including sub section (4) of the Act. On the above basis it concluded that if the amount is utilized before the last date of filing of the return under Section 139 of the Act then the provision of Section 54(2) of the Act would not hit the assessee before it. It is not very clear in the above case whether the amounts were utilized before the assessee filed its return of income or not. (w) However, the factual situation arising in the present case is different. The return of income is admittedly filed on 4 th November, 1996. In terms of Section 54F(4) of the Act as interpreted by the Gauhati High Court in Rajesh Kumar /a/an (supra) the amounts subject to capital gain on sale of the capital asset for purpose of exemption, has to be utilized before the date of filing of return of income. In this case 4th November, 1996 is the date of filing the return of Income. It is not disputed that on 4th November, 1996 when the return of income was filed, the entire amount which was subject to capital gain tax had not been utilized for the purpose of construction of new house nor were the unutilized amounts deposited in the notified Bank A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hd/2018 , the Ahmedabad Tribunal on similar set of facts allowed the appeal of the assessee with the following observations: From a plain reading of Section 54(2) of the Act it is clear that only Section 139 is mentioned in the context that the unutilized portion of the capital gain on the sale of property used for residence should be deposited before the date of furnishing the return of tax under Section 139 of the Act. Therefore, Section 139 cannot be confined only to the provisions of the Section 139(1), but it includes all the sub section of Section 139 of the Act. .. .we find that if the intention is not to retain cash but to invest in construction or purchase any property and if such investment period stipulated therein, then Section 54F(4) is not attracted. It appears from the records that the assessee has complied with the requirement of the substantive provision of Section 139 and, therefore, is entitled to the claim of exemption under Section 54F of the Act. Hence, we find no reason to pass such order by the Revenue in disallowing the exemption of Rs. 35,07,459/- as the claimed under Section 54F of the Act by the assessee. The order is, thus, quashed. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier, under sub-section (4) of section 139. [Para 6] 7.2 In the case of Uddhav Krishna Bankar v. ITO [2020] 121 taxmann.com 53 (Pune - Trib.) , the ITAT held that where original agricultural land was sold by assessee on 12-10-2011 and new agricultural land was purchased on 26-8-2013, assessee having complied with requirement of section 54B(2) in light of time limit as per section 139(4), it could not have been denied benefit of exemption under section 54B by only taking into consideration section 139(1). 7.3 In the case of CIT v. Ms. Jagriti Aggarwal[2011] 15 taxmann.com 146 (Punjab Haryana) , the High Court held that due date for furnishing return of income as per section 139(1) is subject to extended period provided under sub-section (4) of section 139 and, if a person had not furnished return of previous year within time allowed under sub-section (1), assessee could file return under sub-section (4) before expiry of one year from end of relevant assessment year. Therefore, section 54 deduction could not be denied to assessee on this and the assessee would be elig ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
