Shri Manilal Dasbhai Makwana, Ahmedabad V. The Income Tax Officer, Ward-3(2)(3), Ahmedabad

ITA 109/AHD/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7920 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 12-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RICHA RASTOGI SR D R
• Section: 143(3); 54B; 54; 139

Judgement Text

, SMC IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ./ I.T.A. NOS. 109 & 110/AHD/2017 ( ASSESSMENT YEAR : 2012-13) (I) MANILAL DASBHAI MAKWANA 116, VANKARVAS, LILAPUR, TAL: DASKROI, AHMEDABAD - 380 060 (II) MAHESH DASBHAI MAKWANA 1, VANKARVAS, LILAPUR, TAL: DASKROI, AHMEDABAD - 380 060 / VS. & THE INCOME TAX OFFICER, WARD-3(2)(3), AHMEDABAD ROOM NO. A-503, 5 TH FLOOR, PRATYAKSHYAKAR BHAVAN, PANJRAPOLE, AMBAWADI, AHMEDABAD 380 015 THE INCOME TAX OFFICER, WARD-3(2)(3), AHMEDABAD ROOM NO. A-503, 5 TH FLOOR, PRATYAKSHYAKAR BHAVAN, PANJRAPOLE, AMBAWADI, AHMEDABAD 380 015 ././ PAN/GIR NO. : (I) BJIPM5425P & (II) BIJPM5425Q ( APPELLANT ) .. ( !' / RESPONDENT ) # / APPELLANT BY : NONE !' $# / RESPONDENT BY : SMT. RICHA RASTOGI, SR. D.R. % &'($) DATE OF HEARING 27/06/2018 *+, $) / DATE OF PRONOUNCEMENT 04/07/2018 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEALS HAVE BEEN FILED AT THE INSTAN CE OF THE TWO DIFFERENT ASSESSEES AGAINST THE ORDER OF THE CIT(A) -3, AHMEDABAD ITA NOS. 109 & 110/AHD/17 [MANILAL & MAHESH D. MAKW ANA VS. ITO] A.Y. 2012-13 - 2 - (CIT(A) IN SHORT), DATED 27 TH SEPTEMBER, 2016 & 26 TH SEPTEMBER, 2016; RESPECTIVELY, ARISING IN THE ASSESSMENT ORDER S BOTH DATED 13.03.2015 PASSED BY THE ASSESSING OFFICER (AO) UND ER S. 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT) CONCERNING AY 20 12-13. 2. THE CAPTIONED APPEALS INVOLVE COMMON ISSUE OF AL LOWABILITY OF DEDUCTION UNDER S. 54B OF THE ACT AND THEREFORE WER E HEARD TOGETHER AND DISPOSED OF BY THIS COMMON ORDER. 3. WE FIRST ADVERT TO ITA NO.109/AHD/2017 FOR APPRE CIATION OF FACTS AND DETERMINATION OF ISSUE. ITA NO.109/AHD/2017 4. THE ASSESSEE HAS CHALLENGED THE ACTION OF THE RE VENUE AUTHORITIES IN DISALLOWING DEDUCTION OF RS.5,18,125 /- CLAIMED UNDER S.54B OF THE ACT. 5. BRIEFLY STATED, THE ASSESSEE IS AN AGRICULTURIST AND FILED HIS RETURN OF INCOME BELATEDLY ON 24.02.2014 UNDER S.13 9(4) OF THE ACT DECLARING TOTAL INCOME OF RS.2,23,912/-. THE RETUR N FILED BY THE ASSESSEE WAS SUBJECTED TO SCRUTINY ASSESSMENT. IN THE COURSE OF SCRUTINY ASSESSMENT, THE AO NOTICED THAT TWO PARCEL S OF AGRICULTURAL LAND AMOUNTING TO RS.1,85,238/- AND RS.1,91,325/-; RESPECTIVELY WAS PURCHASED BEFORE THE SALE OF AGRICULTURAL LAND. SI MILARLY, ANOTHER AGRICULTURAL LAND WAS PURCHASED FOR RS.5,18,125/- ( SHARE OF THE ITA NOS. 109 & 110/AHD/17 [MANILAL & MAHESH D. MAKW ANA VS. ITO] A.Y. 2012-13 - 3 - ASSESSEE) AFTER DUE DATE OF FILING THE RETURN OF IN COME UNDER S.139(1) OF THE ACT. THE AO THUS TOOK A VIEW THAT IN TERMS OF PROVISIONS OF SECTION 54B(2), THE ASSESSEE WAS REQUIRED TO DEPOSI T THE CAPITAL GAINS IN THE PRESCRIBED BANK ACCOUNT BEFORE THE DUE DATE OF FILING RETURN OF INCOME UNDER S.139(1) OF THE ACT. THE ASSESSEE HOW EVER HAS FAILED TO DEPOSIT THE CAPITAL GAIN IN THE BANK ACCOUNT AS PER THE REQUIREMENTS OF SECTION 54B(2) OF THE ACT. THE AO THEREFORE DISALL OWED THE CLAIM OF DEDUCTION UNDER S.54B (WITH REFERENCE TO CAPITAL GA INS ARISING ON SALE OF AGRICULTURAL LAND) IN RESPECT OF BOTH (I) AGRICU LTURAL LANDS PURCHASED BEFORE THE SALE OF THE LAND AND (II) AGRICULTURAL L AND PURCHASED AFTER THE DUE DATE OF FILING OF RETURN OF INCOME UNDER S. 139(1) OF THE ACT. 6. IN THE FIRST APPEAL, THE CIT(A) ALLOWED DEDUCTIO N UNDER S.54B OF THE ACT AGGREGATING TO RS.3,76,563/- IN RESPECT OF LAND PURCHASED BEFORE SALE OF ORIGINAL LAND HAVING REGARD TO JUDIC IAL PRECEDENTS AND CBDT CIRCULAR ON THIS ACCOUNT. THE CIT(A) HOWEVER CONTINUED TO DENY THE DEDUCTION OF LONG TERM CAPITAL GAINS OF RS .5,18,125/- UNDER S.54B OF THE ACT TOWARDS PURCHASE OF AGRICULTURAL L AND AFTER THE DUE DATE OF FILING OF RETURN OF INCOME UNDER S. 139(1) OF THE ACT BASED ON INTERPRETATION OF EMBARGO PLACED UNDER S. 54B(2) OF THE ACT. 7. AGGRIEVED BY THE DENIAL OF DEDUCTION UNDER S.54B TOWARDS PURCHASE OF AGRICULTURAL LAND AFTER THE DUE DATE OF FILING OF RETURN UNDER S.139(1) OF THE ACT, THE ASSESSEE PREFERRED A PPEAL BEFORE THE TRIBUNAL. ITA NOS. 109 & 110/AHD/17 [MANILAL & MAHESH D. MAKW ANA VS. ITO] A.Y. 2012-13 - 4 - 8. WHEN THE MATTER WAS CALLED FOR HEARING, NONE APP EARED FOR THE ASSESSEE DESPITE SERVICE OF NOTICE. ACCORDINGLY, T HE MATTER WAS PROCEEDED EX PARTE. 9. THE LEARNED DR RELIED UPON THE ORDER OF THE CIT( A) AND CONTENDED THAT IN VIEW OF THE PROVISIONS OF SECTION 54B(2) OF THE ACT, THE ASSESSEE WAS REQUIRED TO EITHER PURCHASE ANOTHE R AGRICULTURAL LAND (NOW ASSET)OR IN THE ALTERNATIVE WAS REQUIRED TO DE POSIT THE UN-UTILIZED CAPITAL GAINS IN SPECIFIED BANK ACCOUNT FOR ITS SUB SEQUENT UTILIZATION FOR PURCHASE OF NEW ASSET. THE ASSESSEE HAS NEITHE R ACQUIRED THE NEW ASSET (AGRICULTURAL LAND) NOR DEPOSITED THE AMOUNT OF CAPITAL GAIN IN THE SPECIFIED BANK ACCOUNT WITHIN THE DUE DATE OF F ILING OF RETURN OF INCOME UNDER S.139(1) OF THE ACT I.E. 31 ST JULY, 2012. THE LEARNED DR ACCORDINGLY CONTENDED THAT THE LEARNED CIT(A) HAS R IGHTLY DECLINED TO INTERFERE WITH THE ACTION OF THE AO. 10. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MA DE ON BEHALF OF THE REVENUE AND ALSO PERUSED THE ASSESSMENT ORDER A S WELL AS THE FIRST APPELLATE ORDER OF THE CIT(A). THE ASSESSEE IN THE PRESENT APPEAL HAS CONTROVERTED THE DENIAL OF DEDUCTION CLAIMED UNDER S.54B TOWARDS CAPITAL GAIN ARISING SALE OF AGRICULTURAL LAND. IT IS THE CASE OF THE ASSESSEE THAT IT HAS PURCHASED NEW ASSET (AGRICULTU RAL LAND) ON 06.02.2013 WHICH FALLS WITHIN THE EXTENDED DUE DATE FOR FILING THE RETURN OF INCOME UNDER S.139(4) OF THE ACT. THE AS SESSEE HAS FILED ITS ITA NOS. 109 & 110/AHD/17 [MANILAL & MAHESH D. MAKW ANA VS. ITO] A.Y. 2012-13 - 5 - RETURN OF INCOME ON 24.02.2014 (I.E. AFTER INVESTME NT IN NEW ASSET) UNDER S.139(4) OF THE ACT. IT IS THUS THE CLAIM OF THE ASSESSEE BEFORE THE LOWER AUTHORITIES THAT THE ASSESSEE COMPLIES WI TH THE CONDITION PLACED UNDER S.54B(2) OF THE ACT FOR THE PURPOSES O F ELIGIBILITY OF DEDUCTION UNDER S.54B(1) OF THE ACT. IT IS APPAREN TLY THE CASE OF THE ASSESSEE THAT THE EMBARGO PLACED UNDER S.54B(2) IS THAT THE UN-UTILIZED CAPITAL GAIN IS REQUIRED TO BE INVESTED FOR ACQUISI TION OF NEW ASSET WITHIN THE TIME LIMIT PRESCRIBED UNDER S.139 OF THE ACT AND THEREFORE THE TIME LIMIT CANNOT BE RESTRICTED TO WHAT IS REFE RRED TO UNDER S.139(1) OF THE ACT BUT ALSO EXTENDS TO ENCOMPASS EXTRA TIME LIMIT AVAILABLE UNDER S.139(4) OF THE ACT. 11. WE FIND OURSELVES IN AGREEMENT WITH THE CASE MA DE OUT BY THE ASSESSEE BEFORE THE LOWER AUTHORITIES AS NOTED ABOV E. SECTION 54B(2) OF THE ACT ENJOINS THAT THE CAPITAL GAIN IS REQUIRE D TO BE UTILIZED BY THE ASSESSEE TOWARDS PURCHASE OF NEW ASSET BEFORE FURNI SHING OF RETURN OF INCOME UNDER S.139 OF THE ACT. ALTERNATIVELY, IN T HE EVENT OF NON- UTILIZATION OF CAPITAL GAINS TOWARDS PURCHASE OF NE W ASSET, THE ASSESSEE IS REQUIRED TO DEPOSIT THE CAPITAL GAIN IN SPECIFIE D BANK ACCOUNT BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME UNDER S. 139(1) OF THE ACT. THUS, A DISTINCTION HAS BEEN DRAWN IN THE ACT IN TH E TWO SITUATIONS; (I) WHERE PURCHASE OF NEW ASSET IS INVOLVED AND (II) WH ERE THE ASSESSEE OPTS TO DEPOSIT THE UNUTILIZED AMOUNT IN THE SPECIF IED BANK ACCOUNT. THE ASSESSEE, IN THE INSTANT CASE, DOES NOT CLAIM T O HAVE DEPOSITED THE ITA NOS. 109 & 110/AHD/17 [MANILAL & MAHESH D. MAKW ANA VS. ITO] A.Y. 2012-13 - 6 - MONEY IN THE SPECIFIED BANK ACCOUNTS UNDER CAPITAL GAIN CLAIM AT ALL. THEREFORE, THE CLAIM OF THE ASSESSEE IS REQUIRED TO BE WEIGHED ON THE SECOND LIMB OF SECTION 54(2) OF THE ACT I.E. WHETHE R THE CAPITAL GAIN HAS BEEN UTILIZED FOR THE PURCHASE OF NEW ASSET BEF ORE THE DATE OF FURNISHING RETURN OF INCOME UNDER S.139 OF THE ACT. AS NOTED, THE LEGISLATURE IN ITS OWN WISDOM HAS USED THE EXPRESSI ON SECTION 139 FOR PURCHASE ETC. OF NEW ASSET WHILE ON THE OTHER H AND TIME LIMIT UNDER S.139(1) HAS BEEN SPECIFIED FOR DEPOSIT IN CAPITAL GAIN ACCOUNT SCHEME. WHEN VIEWED EQUITABLY AND LIBERALLY, THE DISTINCTIO N BETWEEN THE TWO DIFFERENT FORMS OF EXPRESSION TO TIME LIMIT CAN YIE LD DIFFERENT RESULTS. SECTION 139 ENCOMPASSES BOTH SECTION 139(1) AND 139 (4) OF THE ACT. THERE IS A NORMAL PRESUMPTION THAT WORDS ARE USED I N ACT OF PARLIAMENT CORRECTLY AND EXACTLY AND NOT LOOSELY AN D IN-EXACTLY. IN THE PRESENT CASE, WE ARE CONCERNED WITH THE UTILIZA TION OF CAPITAL GAINS BY PURCHASE OF NEW ASSET FOR WHICH THE LEGISLATURE HAS STOPPED SHORT BY MAKING REFERENCE OF SECTION 139 OF THE ACT, IN V ARIATION TO SECTION 139(1) OF THE ACT REFERRED FOR DEPOSIT IN CAPITAL G AIN SCHEME. THIS DISTINCTION ASSUMES SIGNIFICANCE FOR INTERPRETATION OF A BENEFICIAL PROVISION. THUS, A BENEFICIAL VIEW MAY BE TAKEN TO SAY THAT SECTION 139 BEING OMNIBUS AND COLORLESS WOULD COVER EXTENDE D TIME LIMIT PROVIDED UNDER S. 139(4) OF THE ACT. THUS, WHEN AN ASSESSEE FURNISHES RETURN SUBSEQUENT TO DUE DATE OF FILING RETURN UNDE R S.139(1) BUT WITHIN THE EXTENDED TIME LIMIT UNDER S.139(4), THE BENEFIT OF INVESTMENT MADE UP TO THE DATE OF FURNISHING OF RET URN OF INCOME PRIOR ITA NOS. 109 & 110/AHD/17 [MANILAL & MAHESH D. MAKW ANA VS. ITO] A.Y. 2012-13 - 7 - TO FILING RETURN UNDER S.139(4) CANNOT BE DENIED ON SUCH BENEFICIAL CONSTRUCTION. THUS, ON FIRST PRINCIPLES, WE HOLD TH AT THE CAPITAL GAINS UTILIZED TOWARDS PURCHASE OF NEW ASSET BEFORE FURNI SHING OF RETURN OF INCOME BEFORE EITHER UNDER S.139(1) OR UNDER S.139( 4) OF THE ACT WILL BE DEEMED TO BE SUFFICIENT COMPLIANCE OF SECTION 54 (2) OF THE ACT. 12. ON THE BASIS OF LEGAL PRINCIPLES SET OUT ABOVE, THE ASSESSEE WOULD BE REQUIRED TO DEMONSTRATE BEFORE THE AO THAT THE INVESTMENT IN THE NEW ASSET HAS ACTUALLY HAPPENED BEFORE FURNISHI NG OF RETURN OF INCOME BY THE ASSESSEE UNDER S.139(4) OF THE ACT ON 24.02.2014. THE AO SHALL GRANT RELIEF TO THE ASSESSEE UNDER S.54B O F THE ACT IN ACCORDANCE WITH LAW, WHERE IT IS FOUND THAT THE INV ESTMENT HAS BEEN CARRIED OUT IN THE NEW ASSET AS CONTEMPLATED IN SEC TION 54B BEFORE THE DATE OF FURNISHING BELATED RETURN OF INCOME UNDER S .139(4) OF THE ACT. ACCORDINGLY, THE ISSUE IS SET ASIDE TO THE FILE OF THE AO FOR THE PURPOSES OF VERIFICATION OF FACTUAL ASPECTS AFTER G IVING PROPER OPPORTUNITY TO THE ASSESSEE. 13. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO . 109/AHD/2017 IS ALLOWED EX PARTE FOR STATISTICAL PURPOSES. ITA NO.110/AHD/2017 14. THE FACTS AND ISSUE IN ITA NO.110/AHD/2017 ARE IDENTICAL. THEREFORE WHILE UPHOLDING THE CLAIM OF THE ASSESSEE FOR ELIGIBILITY OF DEDUCTION UNDER S.54B OF THE ACT ON FIRST PRINCIPLE S, THE FACTUAL ITA NOS. 109 & 110/AHD/17 [MANILAL & MAHESH D. MAKW ANA VS. ITO] A.Y. 2012-13 - 8 - ASPECTS TOWARDS INVESTMENT IN NEW ASSET MADE SHALL BE EXAMINED BY THE AO ON THE SIMILAR LINES AS PER THE OTHER APPEAL . IN PARITY, THE ISSUES IN APPEAL IN ITA NO.110/AHD/2017 ARE THUS RE STORED TO THE FILE OF AO FOR FRESH ADJUDICATION. 15. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO . 110/AHD/2017 IS ALLOWED EX PARTE FOR STATISTICAL PURPOSES. 16. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE HEREIN ARE ALLOWED FOR STATISTICAL PURPOSES. SD/- SD/- (MAHAVIR PRASAD) (PRADIP KUMA R KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 04/07/2018 TRUE COPY S. K. SINHA / COPY OF ORDER FORWARDED TO:- ..' / REVENUE 2.' / ASSESSEE 0. ) % 1) / CONCERNED CIT 4. % 1)- / CIT (A) 4.5'67!8)8& 9 9 / DR, ITAT, AHMEDABAD :.7;<= / GUARD FILE. BY ORDER / 9 / 9 THIS ORDER PRONOUNCED IN OPEN COURT ON 04/07/20 18