MIICHAEL J PEREIRA, MUMBAI V. ITO 19(2)-4, MUMBAI

ITA 1101/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78975 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 20-05-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 07-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K SAHU
• Keywords: Reopening of assessment; Capital asset; Opportunity of being heard; Period of limitation; Cost of acquisition; Benefit of exemption; Reason to believe
• Section: 54F; 148; 54; 139

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL G, BENC H MUMBAI , . . , ! BEFORE SHRI VIJAY PAL RAO, JM & SHRI B.R.BASKARAN, AM ./ ITA NO.1101/MUM/2011 ( ' ' ' ' / ASSESSMENT YEAR :2004-05) MICHAEL J. PEREIRA, 602/B, SPRING TIME, 3 RD GOLIBAR ROAD, SANTACRUZ (EAST), MUMBAI-400 055 VS. ITO 19(2)-4, MUMBAI # ! ./ $ ./ PAN/GIR NO. : AASPP 0678 H ( #% / APPELLANT ) .. ( &'#% / RESPONDENT ) () * ** * + + + + /ASSESSEE BY : MR.NITESH JOSHI & MR. MUKESH TRIVEDI * ** * + + + + /REVENUE BY : MR. R.K.SAHU * ),! / DATE OF HEARING : 20 TH MAY, 2014 -.' * ),! / DATE OF PRONOUNCEMENT : 23 RD MAY, 2014 / / / / / O R D E R PER B.R.BASKARAN (A.M.) : THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINS T THE ORDER DATED 23.11.2010 PASSED BY LD CIT(A)-30, MUMBAI AND IT RE LATES TO THE ASSESSMENT YEAR 2004-05. 2 . THE GROUNDS URGED BY THE ASSESSEE BEFORE US G IVE RISE TO THE FOLLOWING TWO ISSUES:- I) VALIDITY OF REOPENING OF THE ASSESSMENT U/S.147 OF THE ACT. II) REJECTION OF CLAIM FOR DEDUCTION U/S.54 OF THE ACT. 3 . THE FACTS RELATING TO THE CASE AS STATED IN BRIEF :- THE ASSESSEE HEREIN FILED HIS RETURN OF INCOME BEL ATEDLY ON 31.01.2006 DECLARING TOTAL INCOME OF RS.9,22,225/-. THE RETURN WAS ITA NO.1101 /11 2 PROCESSED UNDER SECTION 143(1) OF THE ACT. THE ASSE SSMENT WAS REOPENED SUBSEQUENTLY BY ISSUING NOTICE UNDER SECTI ON 148 OF THE ACT. THE ASSESSEE SOUGHT FOR THE REASONS FOR REOPENING T HE ASSESSMENT AND THE ASSESSING OFFICER SUPPLIED THE REASONS TO THE A SSESSEE, VIDE HIS LETTER DATED 5-2-2009, WHEREIN IT IS STATED THAT THE ASSES SEE HAS NOT PURCHASED NEW HOUSE WITHIN THE PERIOD PRESCRIBED U/S. 54(1) O F THE ACT AND ALSO DID NOT DEPOSIT AMOUNT IN CAPITAL GAINS ACCOUNT SCHEME AS ENVISAGED U/S.54(2) OF THE ACT. ACCORDINGLY, IT WAS STATED T HAT THE AO HAD REASON TO BELIEVE THAT THE INCOME HAS ESCAPED ASSESSMENT BY A LLOWING THE CLAIM FOR DEDUCTION MADE UNDER SECTION 54, WHICH THE ASSESSEE WAS NOT ENTITLED TO. 4 . FACTS RELATING TO THE CLAIM MADE BY THE ASSESSEE UNDER SECTION 54 OF THE ACT ARE STATED IN BRIEF. THE ASSESSEE SOLD T HE FLAT BEARING NO.41, DREAM QUEEN PREMISES CO.OP. SOCIETY, SANTACRUZ (W) (HEREINAFTER ORIGINAL ASSET), VIDE AGREEMENT DATED 21-6-2013 F OR CONSIDERATION OF RS.1 CRORE. THE ASSESSEE INCURRED INCIDENTAL EXPEN SES IN CONNECTION WITH THE TRANSFER TO THE TUNE OF RS.17,320/- AND TH US, DISCLOSED NET SALE CONSIDERATION AT RS.99,82,680/-. AFTER REDUCING IND EXED COST OF ACQUISITION, THE LONG TERM CAPITAL GAIN WAS WORKED OUT AT RS.59,64,998/-. AGAINST THE SAME, THE ASSESSEE CLAIMED DEDUCTION UN DER SECTION 54F OF THE ACT TO THE TUNE OF RS.50,12,860/- IN HIS RETURN OF INCOME. 4.1 THERE IS SOME CONFUSION ABOUT THE SECTION UNDE R WHICH THE DEDUCTION IS CLAIMED. IN THE RETURN OF INCOME, THE DEDUCTION WAS CLAIMED ITA NO.1101 /11 3 U/S 54F OF THE ACT. BUT IN THE ASSESSMENT ORDER AS WELL AS IN THE CIT(A)S ORDER, THE DEDUCTION SO CLAIMED IS REFERRED TO AS U /S 54 AND ALSO U/S 54F OF THE ACT. IT IS PERTINENT TO NOTE THAT THE METHO D OF COMPUTATION OF QUANTUM OF DEDUCTION U/S 54 AND U/S 54F ARE DIFFERE NT. SUBJECT TO THE CONFUSION CITED ABOVE, WE PROCEED TO ADJUDICATE THE ISSUES URGED BEFORE US. 5 . THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE H AS CLAIMED DEDUCTION U/S.54F IN RESPECT OF PURCHASE OF FLAT AT SPRING TIME (HEREINAFTER NEW ASSET), WHICH WAS PURCHASED ON 1 3-6-2005. THE AO FURTHER NOTICED THAT THE ORIGINAL ASSET LOCATED I N SANTANCRUZ WAS SOLD, VIDE AGREEMENT DATED 21-5-2003. AS PER THE PROVISI ONS OF SEC. 54 / 54F, THE NEW ASSET SHOULD BE PURCHASED WITHIN 2 YEARS FR OM THE DATE OF TRANSFER OF ORIGINAL ASSET. THE AO TOOK THE VIEW T HAT THE DATE OF TRANSFER OF ORIGINAL ASSET IS THE DATE OF AGREEMENT FOR SALE , I.E., 21.5.2003. SINCE THE DATE OF PURCHASE OF THE NEW HOUSE WAS ON 13-6-2 005, THE SAID DATE FELL BEYOND THE PERIOD OF TWO YEARS FROM THE DATE OF TRANSFER OF ORIGINAL ASSET, AS COMPUTED BY THE ASSESSING OFFICER. THE A O ALSO NOTICED THAT THE ASSESSEE HAS NOT COMPLIED WITH THE PROVISIONS O F SUB-SECTION 2 OF SECTION 54, WHICH STATES THAT THE UNUTILIZED AMOUNT SHOULD BE DEPOSITED IN CAPITAL GAINS ACCOUNT SCHEME. ACCORDINGLY, THE ASSE SSING OFFICER PROPOSED TO DENY THE DEDUCTION CLAIMED BY THE ASSES SEE U/S.54 / 54F OF THE ACT. ITA NO.1101 /11 4 6 . THE ASSESSEE SUBMITTED THAT HE ENTERED INTO AN AG REEMENT FOR SALE OF PROPERTY ON 21-5-2003 BY RECEIVING THE ADVANCE O F RS.10 LAKHS. HOWEVER, THE BALANCE CONSIDERATION OF RS.90 LAKHS W AS RECEIVED ONLY ON 22-7-2003 UPON HANDING OVER THE POSSESSION OF THE S AID FLAT. ACCORDINGLY, THE ASSESSEE CONTENDED THAT THE DATE OF TRANSFER SHOULD BE TAKEN AS 22-7-2003. THE ASSESSEE FURTHER SUBMITTED THAT THE NEW ASSET WAS PURCHASED, VIDE AGREEMENT DATED 13-6-2005 AND T HE POSSESSION WAS TAKEN ON 20-6-2005. ACCORDINGLY IT WAS SUBMITTED T HAT THE ASSESSEE HAS PURCHASED THE NEW ASSET WITHIN TWO YEARS FROM THE D ATE OF TRANSFER OF THE ORIGINAL ASSET AND HENCE HE IS ELIGIBLE FOR DEDUCTI ON UNDER SECTION 54 OF THE ACT. 7 . WITH REGARD TO THE QUESTION OF NOT DEPOSITING TH E AMOUNT IN CAPITAL GAINS ACCOUNT SCHEME IN TERMS OF SEC. 54(2) OF THE ACT, THE ASSESSEE SUBMITTED THAT HE HAD PAID A SUM OF RS.60 LAKHS TO ANOTHER BUILDER NAMED M/S SILVEX DEVELOPERS PVT. LTD FOR PURCHASE OF A F LAT IN VILLA SANTACRUZ, VIDE AGREEMENT DATED 27-5-2003. SINCE THE PROJECT W AS NOT IN PROGRESS AS ORIGINALLY CONTEMPLATED, THE ASSESSEE WAS CONSTRAIN ED TO CANCEL THE BOOKING. AFTER MUCH PERSUASION AND FOLLOW UP, THE ASSESSEE RECEIVED BACK THE AMOUNT OF RS.60 LAKHS ON 4-5-2005. ON THE VERY SAME DATE, THE ASSESSEE GOT ALLOTMENT OF NEW ASSET FROM ANOTHER BU ILDER NAMED M/S ACE ASSOCIATES BY PAYING AN ADVANCE AMOUNT. ACCORDI NGLY, IT WAS SUBMITTED THAT THE ASSESSEE HAS PARTED WITH THE AMO UNT IMMEDIATELY ON SALE OF OLD FLAT AND DUE TO THE TIME GAP IN RECEIVI NG THE SAID AMOUNT, IT ITA NO.1101 /11 5 COULD NOT DEPOSIT THE SALE CONSIDERATION IN CAPITAL GAINS ACCOUNT SCHEME. THE ASSESSEE PLACED RELIANCE ON THE DECISION OF MUM BAI BENCH OF THE TRIBUNAL IN THE CASE OF MUKESH G. DESAI (HUF) VS. ITO (2010) 122 ITD 212 AND SUBMITTED THAT THE ASSESSEE SHOULD NOT BE FOUN D FAULT WITH, SINCE THERE WAS AN IMPOSSIBLE SITUATION FOR THE ASSESSEE TO COMPLY WITH THE PROVISIONS OF SECTION 54(2) DUE TO PECULIAR FACTS A ND CIRCUMSTANCES OF THE CASE. THE AO, HOWEVER, WAS NOT CONVINCED WITH THE E XPLANATIONS OF THE ASSESSEE AND ACCORDINGLY REJECTED THE CLAIM FOR DED UCTION UNDER SECTION 54 / 54F OF THE ACT. 8 . IN APPEAL FILED BY THE ASSESSEE, THE CIT(A) CONCU RRED WITH THE VIEWS OF THE ASSESSING OFFICER AND ACCORDINGLY UPHE LD THE ORDER OF THE AO. THE LD CIT(A) ALSO UPHOLD THE VALIDITY OF REOPENING OF ASSESSMENT. HENCE, THE ASSESSEE HAS FILED THIS APPEAL BEFORE US . 9 . THE FIRST ISSUE RELATES TO THE VALIDITY OF RE- OPENING OF ASSESSMENT. THE LD COUNSEL FOR THE ASSESSEE CONTENDED THAT THE REOPENING OF ASSESSMENT IS BAD IN LAW, SINCE THE ASSESSING OFFIC ER HAS ONLY ENTERTAINED BELIEF OF ESCAPEMENT OF INCOME ON SURMISES, VIZ., A BOUT THE INELIGIBILITY OF THE ASSESSEE TO CLAIM DEDUCTION U/S 54 OF THE ACT A ND HE HAS NOT BROUGHT ON RECORD ANY CASE OF CONCEALMENT OF INCOME. ON TH E CONTRARY, THE LD D.R SUBMITTED THAT THE ASSESSING OFFICER, AT THE TI ME OF ISSUING NOTICE U/S 148 OF THE ACT, SHOULD HAVE ONLY REASON TO BELIEVE THAT ANY INCOME HAS ESCAPED THE ASSESSMENT. HE FURTHER SUBMITTED THAT THE ASSESSING OFFICER, AT THE TIME OF ISSUING NOTICE FOR REOPENING OF ASSE SSMENT, IS NOT REQUIRED ITA NO.1101 /11 6 TO CONCLUSIVELY ESTABLISH THAT THERE WAS ESCAPEMENT OF INCOME. BOTH THE PARTIES PLACED RELIANCE ON HOST OF CASE LAWS IN SUP PORT OF THEIR RESPECTIVE CONTENTIONS. 10 . HAVING HEARD BOTH THE PARTIES ON THIS PRELIMINARY ISSUE, WE ARE OF THE VIEW THAT THERE IS NO MERIT IN THE CONTENTION O F THE ASSESSEE ON THIS ISSUE. AS ALREADY NOTICED, THE ASSESSEE HAS CLAIME D DEDUCTION U/S 54F OF THE ACT IN HIS RETURN OF INCOME. THE SAID CLAIM WA S FOUND, PRIMA FACIE, NOT ADMISSIBLE FOR THE REASONS STATED BY THE ASSESSING OFFICER, VIZ., THE PURCHASE OF HOUSE PROPERTY WAS AFTER THE EXPIRY OF MANDATORY PERIOD OF TWO YEARS AND THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO DEPOSIT THE UNUTILISED AMOUNT IN CAPITAL GAINS ACCOUNT SCHEME I N TERMS OF SEC. 54(2) OF THE ACT. AS SUBMITTED BY LD D.R, IT IS A WELL S ETTLED PROPOSITION THAT THE ASSESSING OFFICER NEED NOT CONCLUSIVELY PROVE THAT THERE WAS ESCAPEMENT OF INCOME AT THE TIME OF ISSUING NOTICE U/S 148 OF THE ACT. THERE SHOULD NOT BE ANY DOUBT THAT THE DEDUCTION WRONGLY ALLOWED WOULD GIVE RISE TO ESCAPEMENT OF INCOME. HENCE, IN THE FACTS AND CIR CUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT THE ASSESSING OFFICER HAD REASON TO BELIEVE THAT THE INCOME HAS ESCAPED THE ASSESSMENT IN THE H ANDS OF THE ASSESSEE. ACCORDINGLY WE REJECT THE GROUND URGED BY THE ASSESSEE ON THE ISSUE OF REOPENING OF ASSESSMENT. 11 . THE NEXT ISSUE RELATES TO THE CLAIM FOR DEDUCTION U/S 54 OF THE ACT. BEFORE US, THE LD A.R SUBMITTED THAT THE ASSESSEE E NTERED INTO AN AGREEMENT ON 21.5.2003 FOR SALE OF THE ORIGINAL ASS ET FOR AN AGREED ITA NO.1101 /11 7 AMOUNT OF RS.100 LAKHS AND RECEIVED AN ADVANCE OF R S.10.00 LAKHS ON THAT DATE. THE BALANCE CONSIDERATION OF RS.90.00 L AKHS WAS RECEIVED ON 22.07.2003 BY HANDING OVER THE POSSESSION OF THE OR IGINAL ASSET TO THE BUYER. ACCORDING TO LD COUNSEL, THE DATE OF TRANS FER OF THE ORIGINAL ASSET HAS TO BE TAKEN AS 22.07.2003, I.E., THE DATE ON WH ICH THE POSSESSION WAS GIVEN. ACCORDINGLY HE SUBMITTED THAT THE TAX AUTHO RITIES ARE NOT CORRECT IN ADOPTING THE DATE OF TRANSFER AS THE DATE OF AGRE EMENT, VIZ., 21.5.2003. ON THE CONTRARY, THE LD D.R PLACED STRONG RELIANCE ON THE ORDER OF LD CIT(A). 12 . WE SHALL NOW DWELL UPON THE FACTS RELATING TO THE PURCHASE OF NEW ASSET. THE ASSESSEE HAS CLAIMED EXEMPTION U/S 54 O F THE ACT IN RESPECT OF NEW ASSET, WHICH WAS A FLAT PURCHASED AT SPRING TIME, SANTACRUZ (E) BY ENTERING INTO AN AGREEMENT ON 13.6.2005. THE LD A.R SUBMITTED THAT THE ASSESSEE HAS PURCHASED THIS PROPERTY FROM M/S A CE ASSOCIATES. HE FURTHER SUBMITTED THAT THE ASSESSEE OBTAINED ALLOTM ENT LETTER ON 04.05.2005 AND THE COPY OF THE SAME IS PLACED AT PA GE 74 OF THE PAPER BOOK. HE SUBMITTED THAT THE ASSESSEE STARTED PAYIN G INSTALMENTS FROM THE DATE OF ALLOTMENT AND THE FINAL PAYMENT WAS MAD E ON 21.6.2005. INVITING OUR ATTENTION TO THE POSSESSION RECEIPT, COPY OF WHICH IS PLACED AT PAGE 101 OF THE PAPER BOOK, THE LD A.R SUBMITTED THAT THE ASSESSEE OBTAINED POSSESSION ON 20-06-2005. ACCORDINGLY, TH E LD A.R SUBMITTED THAT THE ASSESSEE HAS PURCHASED THE PROPERTY WITHIN TWO YEARS FROM THE DATE OF TRANSFER OF THE ORIGINAL ASSET. ITA NO.1101 /11 8 13 . WE NOTICE THAT THERE IS NO DISPUTE BETWEEN TH E PARTIES ABOUT THE DATE OF PURCHASE OF NEW ASSET. THE DISPUTE IS WITH REGARD TO THE DATE OF TRANSFER OF THE ORIGINAL ASSET. IF THE DATE OF TRA NSFER OF ORIGINAL ASSET IS TAKEN AS 21.5.2003, THE DATE OF PURCHASE OF NEW ASS ET WOULD FALL BEYOND THE PRESCRIBED PERIOD OF TWO YEARS. ON THE CONTRAR Y, IF THE DATE OF TRANSFER OF ORIGINAL ASSET IS TAKEN AS 22.7.2003, THE PURCHA SE OF NEW ASSET WOULD BE WITHIN THE PRESCRIBED PERIOD OF 2 YEARS. HENCE THE QUESTION THAT ARISES BEFORE US IS WHICH DATE SHOULD BE TAKEN AS THE DA TE OF TRANSFER. 14 . THE TERM TRANSFER IS DEFINED UNDER SEC. 2(47) O F THE ACT. THE SUB CLAUSES (V) AND (VI) OF THE ABOVE SAID SECTION READ AS UNDER:- 2(47) TRANSFER IN RELATION TO A CAPITAL ASSET, INCLUDES,- .. (V) ANY TRANSACTION INVOLVING THE ALLOWING OF POSSE SSION OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED IN PART PERFORMANCE OF A CONTRACT OF THE NATURE REFERRED IN SECTION 53A O F THE TRANSFER OF PROPERTY ACT, 1882 (4 OF 1882); OR (VI) ANY TRANSACTION (WHETHER BY WAY OF BECOMING A MEMBER OF, OR ACQUIRING SHARES IN, A CO-OPERATIVE SOCIETY, COMPAN Y OR OTHER ASSOCIATION OF PERSONS OR BY WAY OF ANY AGREEMENT O R ANY ARRANGEMENT OR IN ANY OTHER MANNER WHATSOEVER) WHIC H HAS THE EFFECT OF TRANSFERRING, OR ENABLING THE ENJOYMENT O F, ANY IMMOVABLE PROPERTY. A CAREFUL PERUSAL OF THE ABOVE SAID PROVISION WOULD SHOW THAT ANY TYPE OF TRANSACTION THAT ALLOWS THE TAKING POSSESSION OF AN Y IMMOVABLE PROPERTY IN PART PERFORMANCE OF THE CONTRACT OF THE NATURE R EFERRED TO IN SEC. 53A OF THE TRANSFER OF PROPERTY ACT OR HAVING THE EFFECT O F TRANSFERRING OR ENABLING THE ENJOYMENT OF THE SAME WOULD FALL UNDER THE DEFI NITION OF TRANSFER ITA NO.1101 /11 9 UNDER THE INCOME TAX ACT. THERE SHOULD NOT BE ANY DOUBT THAT ONE CAN ENABLE THE ENJOYMENT OF THE PROPERTY ONLY BY HANDIN G OVER THE POSSESSION OF THE IMMOVABLE PROPERTY. HENCE, IN OUR VIEW, THE DATE OF HANDING OVER OF THE POSSESSION OF THE IMMOVABLE PROPERTY IS THE MATERIAL DATE, I.E., THE DATE OF TRANSFER. IN THE INSTANT CASE, THERE IS NO DISPUTE THAT THE ORIGINAL ASSET WAS HANDED OVER BY THE ASSESSEE TO THE PURCHA SER ON 22.7.2003, I..E, THE DAY ON WHICH THE BALANCE CONSIDERATION OF RS.90.00 LAKHS WAS RECEIVED BY THE ASSESSEE. ACCORDINGLY, IN OUR VIEW , THE DATE OF TRANSFER OF THE ORIGINAL ASSET SHOULD BE TAKEN AS 22.7.2003 AND NOT 21.5.2003 (DATE OF AGREEMENT) AS HELD BY THE TAX AUTHORITIES. WE FIND SUPPORT FOR THIS VIEW FROM THE DECISION OF HONBLE JURISDICTION AL BOMBAY HIGH COURT IN THE CASE OF CIT VS. GEETADEVI PASARI (2009)(17 DTR (BOM) 280) , WHEREIN THE HIGH COURT HAD FOLLOWED ITS EARLIER DEC ISION RENDERED IN THE CASE OF CHATURBHUJ DWARKADAS KAPADIA VS. CIT (2003)(260 ITR 491) . ACCORDINGLY, WE SET ASIDE THE ORDER OF LD CIT(A) ON THIS ISSUE AND DIRECT THE ASSESSING OFFICER TO ADOPT THE DATE OF TRANSFER AS 22.07.2003. 15 . IN THE EARLIER PARAGRAPHS, WE HAVE ALREADY HELD T HAT THE DATE OF TRANSFER OF THE ORIGINAL ASSET HAS TO BE TAKEN AS 22.07.2003. WE HAVE SEEN THAT THE ASSESSEE HAS TAKEN POSSESSION OF NEW ASSET ON 20-06- 2005 AND ALSO PAID THE ENTIRE CONSIDERATION BY 21.0 6.2005. IT IS SEEN THAT THE DATE OF POSSESSION AS WELL AS THE DATE OF FINAL PAYMENT FALL WITHIN TWO YEARS FROM THE DATE OF TRANSFER OF THE ORIGINAL ASS ET. ACCORDINGLY, WE ARE UNABLE TO SUSTAIN THE VIEW ENTERTAINED BY THE TAX A UTHORITIES THAT THE ASSESSEE HAS PURCHASED THE NEW ASSET AFTER EXPIRY O F TWO YEARS FROM THE ITA NO.1101 /11 10 DATE OF TRANSFER OF THE ORIGINAL ASSET. ACCORDINGLY , WE SET ASIDE THE ORDER OF THE TAX AUTHORITIES ON THIS ISSUE. 16 . THE LD A.R ALTERNATIVELY CONTENDED THAT THE DEVEL OPER, M/S ACE ASSOCIATES HAVE CONSTRUCTED THE FLAT ON BEHALF OF T HE ASSESSEE AND HENCE IT SHOULD BE TAKEN AS A CASE OF CONSTRUCTION OF FL AT, IN WHICH CASE THE TIME LIMIT AVAILABLE FOR THE ASSESSEE IS THREE YEAR S FROM THE DATE OF TRANSFER OF ORIGINAL ASSET. THE LD A.R ALSO CONTEN DED THAT THE DATE OF ALLOTMENT LETTER ISSUED BY M/S ACE ASSOCIATES, I.E. , 04-05-2005 SHOULD BE TAKEN AS DATE OF PURCHASE OF NEW ASSET. IN SUPPO RT OF BOTH THE CONTENTIONS, THE LD A.R PLACED RELIANCE ON CERTAIN CASE LAWS. SINCE WE HAVE HELD THAT THE ASSESSEE HAS PURCHASED THE NEW A SSET WITHIN IN TWO YEARS FROM THE DATE OF TRANSFER OF ORIGINAL ASSET, WE DO NOT FIND IT NECESSARY TO ADJUDICATE THESE ALTERNATIVE CONTENTIO NS URGED BY THE ASSESSEE BEFORE US. 17 . THE ASSESSING OFFICER HAS DENIED THE DEDUCTION U/ S 54 OF THE ACT ON ONE MORE GROUND, VIZ., THE ASSESSEE HAS FAILED TO D EPOSIT THE UNUTILIZED AMOUNT IN CAPITAL GAINS ACCOUNT SCHEME IN TERMS OF SEC. 54(2) OF THE ACT. 18 . THE LD A.R SUBMITTED THAT THE ASSESSEE HAD UTILIZED A SUM OF RS.60.00 LAKHS FOR BOOKING A FLAT WITH M/S SILVEX D EVELOPERS PVT LTD AND HE COULD GET BACK THE SAME ONLY ON 04.5.2005. IT W AS SUBMITTED THAT THE ABOVE SAID DEVELOPER DID CARRY OUT THE CONSTRUCTION ACTIVITY AS ORIGINALLY ENVISAGED. THE LD A.R FURTHER SUBMITTED THAT THE A SSESSEE DID NOT ENTER INTO ANY AGREEMENT FOR PURCHASE OF FLAT FROM M/S SI LVEX DEVELOPERS PVT ITA NO.1101 /11 11 LTD AND ALSO DID NOT OBTAIN ANY RECEIPT FOR PAYMENT OF RS.60.00 LAKHS. THE LD. A.R, INSTEAD PLACED RELIANCE ON THE ORDER P ASSED BY LD CIT(A) AGAINST THE PENALTY ORDER, WHEREIN THE FIRST APPELL ATE AUTHORITY HAD EXAMINED THE ABOVE SAID CLAIM OF THE ASSESSEE. AC CORDINGLY, THE LD A.R SUBMITTED THAT THE ASSESSEE WAS UNDER THE IMPRESSIO N THAT M/S SILVEX DEVELOPERS PVT LTD WOULD COMPLETE THE CONSTRUCTION AND HAND OVER THE FLAT AND HENCE THERE WAS NO NECESSITY FOR THE ASSES SEE TO DEPOSIT THE AMOUNT IN THE CAPITAL GAINS ACCOUNT SCHEME AS PER T HE PROVISIONS OF SEC. 54(2) OF THE ACT. HE FURTHER SUBMITTED THAT THE AS SESSEE, IMMEDIATELY UPON RECEIPT OF REFUND FROM M/S SILVEX DEVELOPERS P VT LTD ON 04.5.2005, USED THE SAME TO MAKE PAYMENTS TO M/S ACE ASSOCIATE S FOR PURCHASE OF NEW ASSET. HE SUBMITTED THAT THE ASSESSEE STARTED MAKING PAYMENTS FROM 04.5.2005 ONWARDS AND THE FINAL PAYMENT WAS MA DE ON 21.6.2005. ACCORDINGLY HE SUBMITTED THAT THE ASSESSEE SHOULD N OT BE CONSIDERED AS HAVING VIOLATED THE PROVISIONS OF SEC. 54(2) OF THE ACT IN VIEW OF THE PECULIAR FACTS AND CIRCUMSTANCES OF THE PRESENT CAS E, PARTICULARLY IN VIEW OF THE FACT THERE IS NO MALAFIDE INTENTION ON THE P ART OF THE ASSESSEE. THE LD A.R ALSO PLACED RELIANCE ON THE DECISION RENDERE D BY MUMBAI BENCH OF TRIBUNAL IN THE CASE OF MUKESH G DESAI (HUF) VS. ITO (2010)(122 ITD 212)(MUM) . 19 . ON THE CONTRARY, THE LD D.R SUBMITTED THAT THE A BOVE SAID CLAIMS PUT FORTH BY THE ASSESSEE WERE NOT SUBSTANTIATED WI TH ANY CREDIBLE EVIDENCE. THE LD D.R ALSO CONTENDED THAT THE CHEQ UE TRANSACTIONS FOR PAYMENT OF AND ALSO FOR RECEIPT OF RS.60.00 LAKHS M AY ALSO BE FOR ANY ITA NO.1101 /11 12 OTHER PURPOSE. AT THE TIME OF HEARING, THE LD A.R FAIRLY ADMITTED THAT THE ASSESSEE DID NOT ENTER INTO ANY AGREEMENT FOR PURCH ASE OF FLAT FROM M/S SILVEX DEVELOPERS PVT LTD AND ALSO DID NOT OBTAIN A NY RECEIPT FOR PAYMENT OF RS.60.00 LAKHS. THERE SHOULD NOT BE ANY DISPUT E THAT THE RESPONSIBILITY TO PROVE THE SUBMISSIONS / STATEMENT ALWAYS LIE UPO N THE PERSON WHO MAKES IT. IN THE INSTANT CASE, IT IS THE RESPONSIB ILITY OF THE ASSESSEE TO PROVE THE SUBMISSIONS MADE BY HIM WITH REGARD TO TH E TRANSACTIONS ENTERED WITH M/S SILVEX DEVELOPERS PVT LTD. IN OU R VIEW, IT IS UNBELIEVABLE THAT ANY PRUDENT MAN WOULD GIVE HUGE A MOUNT OF RS.60.00 LAKHS FOR PURCHASE OF A FLAT THAT IS GOING TO BE CO NSTRUCTED WITHOUT ENTERING INTO AN AGREEMENT. DURING THE COURSE OF HEARING, T HE LD A.R FURNISHED AN EVENT SHEET, WHEREIN IT IS STATED THAT THE ASSESSEE HAD ENGAGED THE SERVICES OF TWO LEADING ADVOCATES FOR RECOVERING MO NEY FROM M/S SILVEX DEVELOPERS PVT LTD. HOWEVER, THE LD A.R SUBMITTED THAT THE ASSESSEE DID NOT POSSESS ANY DOCUMENT OR CORRESPONDENCE OR L ETTER OR NOTICE, IF ANY, ISSUED BY THE ADVOCATES ALSO. IN THE ABSENCE OF ANY EVIDENCE TO SUBSTANTIATE THE SUBMISSIONS MADE WITH REGARD TO TH E TRANSACTIONS ENTERED WITH M/S SILVEX DEVELOPERS PVT LTD, WE ARE UNABLE TO ACCEPT THE SUBMISSIONS MADE BY LD A.R IN THIS REGARD. ACCORDI NGLY, WE ARE OF THE VIEW THAT THE ASSESSEE CANNOT TAKE SUPPORT OF THE D ECISION RENDERED IN THE CASE OF MUKESH G DESAI (HUF) (REFERRED SUPRA). 20 . IN THE ALTERNATIVE, THE LD A.R PLACED RELIANCE ON THE DECISION RENDERED BY HONBLE PUNJAB AND HARYANA HIGH COURT I N THE CASE OF CIT VS. MS. JAGRITI AGGARWAL (2011)(339 ITR 610) , WHEREIN THE HONBLE HIGH ITA NO.1101 /11 13 COURT HAS EXPRESSED THE VIEW THAT THE DUE DATE OF F URNISHING OF RETURN CAN BE THE DATE PRESCRIBED U/S 139(4) OF THE ACT. THE LD A.R FURTHER SUBMITTED THAT THE RATIO OF THE ABOVE SAID DECISION HAS BEEN FOLLOWED BY THE CO-ORDINATE BENCH OF MUMBAI TRIBUNAL IN THE CAS E OF KISHORE H GALAIYA VS. ITO (2012)(137 ITD 229)(MUM) . THE LD A.R SUBMITTED THAT THE ASSESSEE HEREIN FILED RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION FOR THE FIRST TIME ON 31.1.2006 U/S 1 39(4) OF THE ACT. HE FURTHER SUBMITTED THAT THE ASSESSEE HAS PURCHASED T HE NEW ASSET BY 20.6.2005, I.E., PRIOR TO THE DATE OF FILING OF RET URN. ACCORDINGLY HE SUBMITTED THAT THERE IS NO NECESSITY FOR THE ASSESS EE TO MAKE DEPOSIT IN CAPITAL GAINS ACCOUNT SCHEME AS PER THE PROVISIONS OF SEC. 54(2) OF THE ACT. 21 . ON THE CONTRARY, THE LD D.R PLACED STRONG RELIANC E ON THE DECISION RENDERED BY HONBLE SUPREME COURT IN THE CASE OF PRAKASH NATH KHANNA VS. CIT (2004)(266 ITR 1) AND SUBMITTED THAT THE HONBLE APEX COURT HAS CLEARLY HELD THAT THE FURNISHING OF RETUR N OF INCOME U/S 139(4) WOULD NOT DILUTE INFRACTION IN NOT FURNISHING RETUR N IN DUE TIME AS PRESCRIBED UNDER SUB-SECTION (1) OF SEC. 139 OF THE ACT. THE LD D.R FURTHER SUBMITTED THAT THE PROVISIONS OF SEC.54(2) UNAMBIGUOUSLY STATES THAT THE DEPOSIT HAS TO BE MADE BEFORE THE DUE DATE PRESCRIBED U/S 139(1) OF THE ACT. HE SUBMITTED THAT THE ASSESSEE HEREIN DID NOT USE THE SALE PROCEEDS / CAPITAL GAIN FOR PURCHASING THE NEW ASSE T WITHIN THE DUE DATE FOR FILING RETURN OF INCOME FOR THE YEAR UNDER CONS IDERATION AND HENCE HE SHOULD HAVE DEPOSITED THE UNUTILISED AMOUNT IN THE CAPITAL GAINS ACCOUNT ITA NO.1101 /11 14 SCHEME IN TERMS OF SEC. 54(2) OF THE ACT. SINCE TH E ASSESSEE HAS FAILED TO DO SO, THE LD D.R CONTENDED THAT THE ASSESSEE IS NOT ELIGIBLE TO CLAIM DEDUCTION U/S 54 OF THE ACT. 22. WE HAVE HEARD RIVAL CONTENTIONS ON THIS ISSU E. THE HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CIT VS. MS. JAGRITI AGGARWAL (2011)(339 ITR 610) HAS HELD AS UNDER:- THE SALE OF THE ASSET HAVING TAKEN PLACE ON 13TH J AN., 2006, FALLING IN THE PREVIOUS (SICASSESSMENT) YEAR 2006-07, THE RETURN COULD BE FILED BEFORE THE END OF RELEVANT ASST. YR. 2007-08 (SIC2006-07) 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 PR OVISION IS NOT AN INDEPENDENT PROVISION, BUT RELATES TO TIME CONTE MPLATED 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 FATIM A BAI AND RAJESH KUMAR JALAN CASES (SUPRA) RESPECTIVELY. THE HONBLE PUNJAB & HARYANA HIGH COURT HAS TAKEN T HE VIEW THAT THE PROVISIONS OF SEC. 139(4) IS NOT AN INDEPENDENT PRO VISION, BUT RELATES TO TIME CONTEMPLATED UNDER SUB-S. (1) OF S. 139. THER EFORE SUCH SUB-S. (4) HAS TO BE READ ALONG WITH SUB-S. (1). THE LD D.R, ON THE OTHER HAND, HAS DISPUTED THE VIEW EXPRESSED BY HONBLE PUNJAB & HAR YANA HIGH COURT BY PLACING HEAVY RELIANCE ON THE DECISION RENDERED BY HONBLE SUPREME COURT IN THE CASE OF PRAKASH NATH KHANNA VS. CIT (SUPRA). THE LD D.R SUBMITTED THAT THE PROVISIONS OF SEC. 139(4) AND 13 9(1) ARE TWO INDEPENDENT PROVISIONS. ITA NO.1101 /11 15 23. SINCE THE CONTROVERSY REVOLVES AROUND SEC. 5 4(2) OF THE ACT, WE FEEL IT PERTINENT TO EXTRACT BELOW THE RELEVANT OBSERVAT IONS MADE BY HONBLE PUNJAB & HARYANA HIGH COURT:- 6. SEC. 54 OF THE ACT CONTEMPLATES THAT THE CAPITAL G AIN ARISES FROM THE TRANSFER OF A LONG-TERM CAPITAL ASSET, BUT IF THE A SSESSEE WITHIN A PERIOD OF ONE YEAR BEFORE OR TWO YEARS AFTER THE DATE ON WHIC H THE TRANSFER TOOK PLACE PURCHASES RESIDENTIAL HOUSE, THEN INSTEAD OF THE CAPITAL GAIN, THE INCOME WOULD BE CHARGED IN TERMS OF PROVISIONS OF S UB-S. (1) OF S. 54. AS PER SUB-S. (2), IF THE AMOUNT OF CAPITAL GAINS IS N OT APPROPRIATED BY THE ASSESSEE TOWARDS THE PURCHASE OF NEW ASSET WITHIN O NE YEAR BEFORE THE DATE ON WHICH THE TRANSFER OF THE ORIGINAL ASSET TO OK PLACE, OR WHICH IS NOT UTILIZED BY HIM FOR THE PURCHASE OR CONSTRUCTION OF THE NEW ASSET BEFORE THE DATE OF FURNISHING THE RETURN OF INCOME UNDER S . 139, THE AMOUNT SHALL BE DEPOSITED BY HIM BEFORE FURNISHING SUCH RETURN N OT LATER THAN DUE DATE APPLICABLE IN THE CASE OF ASSESSEE FOR FURNISHING T HE RETURN OF INCOME UNDER SUB-S. (1) OF S. 139 IN AN ACCOUNT IN ANY SUC H BANK OR INSTITUTION AS MAY BE SPECIFIED. RELEVANT SUB-S. (2) OF S. 54 OF T HE ACT READS AS UNDER : '(2) THE AMOUNT OF THE CAPITAL GAIN WHICH IS NOT APPROPR IATED BY THE ASSESSEE TOWARDS THE PURCHASE OF THE NEW ASS ET MADE WITHIN ONE YEAR BEFORE THE DATE ON WHICH THE TRANSF ER OF THE ORIGINAL ASSET TOOK PLACE, OR WHICH IS NOT UTILIZED BY HIM FOR THE PURCHASE OR CONSTRUCTION OF THE NEW ASSET BEFOR E THE DATE OF FURNISHING THE RETURN OF INCOME UNDER S. 139 , SHALL BE DEPOSITED BY HIM BEFORE FURNISHING SUCH RETURN SUCH DEPOSIT BEING MADE IN ANY CASE NOT LATER THAN THE DUE DATE APPLIC ABLE IN THE CASE OF THE ASSESSEE FOR FURNISHING THE RETURN OF I NCOME UNDER SUB-S. (1) OF S. 139 IN AN ACCOUNT IN ANY SUCH BANK OR INSTITUTION AS MAY BE SPECIFIED IN, AND UTILIZED IN ACCORDANCE WIT H, ANY SCHEME WHICH THE CENTRAL GOVERNMENT MAY, BY NOTIFICATION I N THE OFFICIAL GAZETTEE, FRAME IN THIS BEHALF AND SUCH RETURN SHAL L BE ACCOMPANIED BY PROOF OF SUCH DEPOSIT, AND FOR THE P URPOSES OF SUB-S. (1), THE AMOUNT, IF ANY, ALREADY UTILISED BY THE ASSESSEE FOR THE PURCHASE OR CONSTRUCTION OF THE NEW ASSET TOGET HER WITH THE AMOUNT SO DEPOSITED SHALL BE DEEMED TO BE THE COST OF THE NEW ASSET : PROVIDED THAT IF THE AMOUNT DEPOSITED UNDER THIS SU B-SECTION IS NOT UTILIZED WHOLLY OR PARTLY FOR THE PURCHASE OR CONST RUCTION OF THE NEW ASSET WITHIN THE PERIOD SPECIFIED IN SUB-S. (1), THEN, (I) THE AMOUNT NOT SO UTILISED SHALL BE CHARGED UND ER S. 45 AS THE INCOME OF THE PREVIOUS YEAR IN WHICH THE PERIOD OF THREE YEARS FROM THE DATE OF THE TRANSFER OF THE ORIGINAL ASSET EXPI RES; AND (II) THE ASSESSEE SHALL BE ENTITLED TO WITHDRAW SUC H AMOUNT IN ACCORDANCE WITH THE SCHEME AFORESAID.' ITA NO.1101 /11 16 A CAREFUL READING OF HIGHLIGHTED PORTION SHOWS THAT THE PROVISIONS OF SEC. 54(2) SHALL COME INTO OPERATION ONLY IF THE AMOUNT OF THE CAPITAL GAIN WHICH IS NOT APPROPRIATED BY THE ASSESSEE TOWARDS T HE PURCHASE OF THE NEW ASSET MADE WITHIN ONE YEAR BEFORE THE DATE ON W HICH THE TRANSFER OF THE ORIGINAL ASSET TOOK PLACE, OR WHICH IS NOT UTIL IZED BY HIM FOR THE PURCHASE OR CONSTRUCTION OF THE NEW ASSET BEFORE TH E DATE OF FURNISHING THE RETURN OF INCOME UNDER S. 139. A CAREFUL PERU SAL OF THE OPENING PORTION OF THE PROVISIONS OF SEC. 54(2) WOULD SHOW THAT IT REFERS TO FILING OF RETURN OF INCOME UNDER SEC. 139 ONLY. THERE SHOULD NOT BE ANY DISPUTE THAT THE RETURN OF INCOME CAN BE FILED BY THE ASSES SEE EITHER U/S 139(1) (ORIGINAL RETURN WITHIN THE PRESCRIBED DUE DATE) OR U/S 139(4) (BELATED RETURN WITHIN THE PRESCRIBED PERIOD) . 24 . THE HONBLE GAUHATI HIGH COURT HAD AN OCCASIO N TO CONSIDER THE OPENING PORTION OF SEC. 54(2) OF THE ACT IN THE CAS E OF CIT VS. RAJESH KUMAR JALAN (286 ITR 274) AND THE HIGH COURT HAS EXPRESSED THE FOLLOWING VIEW:- 6. FROM A PLAIN READING OF SUB-S. (2) OF S. 54 OF THE IT ACT, 1961, IT IS CLEAR THAT ONLY S. 139 OF THE IT ACT, 1961, IS MENT IONED IN S. 54(2) IN THE CONTEXT THAT THE UNUTILISED PORTION OF THE CAPITAL GAIN ON THE SALE OF PROPERTY USED FOR RESIDENCE SHOULD BE DEPOSITED BEF ORE THE DATE OF FURNISHING THE RETURN OF THE INCOME-TAX UNDER S. 13 9 OF THE IT ACT. SEC. 139 OF THE IT ACT, 1961, CANNOT BE MEANT ONLY AS S. 139(1) BUT IT MEANS ALL SUB-SECTIONS OF S. 139 OF THE IT ACT, 1961. UND ER SUB-S. (4) OF S. 139 OF THE IT ACT ANY PERSON WHO HAS NOT FURNISHED A RETUR N WITHIN THE TIME ALLOWED TO HIM UNDER SUB-S. (1) OF S. 142 MAY FURNI SH THE RETURN FOR ANY PREVIOUS YEAR AT ANY TIME BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT YEAR OR BEFORE THE COMPLETI ON OF THE ASSESSMENT WHICHEVER IS EARLIER. SUCH BEING THE SITUATION, IT IS THE CASE OF THE RESPONDENT/ASSESSEE THAT THE RESPONDENT/ASSESSEE CO ULD FULFILL THE REQUIREMENT UNDER S. 54 OF THE IT ACT FOR EXEMPTION OF THE CAPITAL GAIN FROM BEING CHARGED TO INCOME-TAX ON THE SALE OF PRO PERTY USED FOR ITA NO.1101 /11 17 RESIDENCE UPTO 30TH MARCH, 1998, INASMUCH AS THE RE TURN OF INCOME-TAX FOR THE ASST. YR. 1997-98 COULD BE FURNISHED BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT YEAR OR BEF ORE THE COMPLETION OF THE ASSESSMENT WHICHEVER IS EARLIER UNDER SUB-S. (4 ) OF S. 139 OF THE IT ACT, 1961. 7. THE APEX COURT IN STATE OF MAHARASHTRA VS. SANTOSH SHANKAR ACHARYA (2000) 7 SCC 463 HELD THAT IT IS TOO WELL KNOWN A P RINCIPLE OF CONSTRUCTION OF STATUTES THAT THE LEGISLATURE ENGRAFTED EVERY PA RT OF THE STATUTE FOR A PURPOSE. THE LEGISLATIVE INTENTION IS THAT EVERY PA RT OF THE STATUTE SHOULD BE GIVEN EFFECT. THE LEGISLATURE IS DEEMED NOT TO W ASTE ITS WORDS OR TO SAY ANYTHING IN VAIN AND A CONSTRUCTION WHICH ATTRIBUTE S REDUNDANCY TO THE LEGISLATURE WILL NOT BE ACCEPTED EXCEPT FOR COMPELL ING REASONS. 8. THE APEX COURT IN BHAVNAGAR UNIVERSITY VS. PALITANA SUGAR MILL (P) LTD. (2003) 2 SCC 111, HELD THAT IT IS THE BASIC PRINCIP LE OF CONSTRUCTION OF STATUTE THAT STATUTORY ENACTMENT MUST ORDINARILY BE CONSTRUED ACCORDING TO THEIR PLAIN MEANING AND NO WORDS SHOULD BE ADDED, A LTERED OR MODIFIED UNLESS IT IS PLAINLY NECESSARY TO DO SO TO PREVENT A PROVISION FROM BEING UNINTELLIGIBLE, ABSURD, UNREASONABLE, UNWORKABLE OR TOTALLY IRRECONCILABLE WITH THE REST OF THE STATUTE. PARAS 24 AND 25 OF TH E BHAVNAGAR UNIVERSITY VS. PALITANA SUGAR MILL (P) LTD. READ AS FOLLOWS : '24. TRUE MEANING OF A PROVISION OF LAW HAS TO BE D ETERMINED ON THE BASIS OF WHAT IT PROVIDES BY ITS CLEAR LANGUAGE , WITH DUE REGARD TO THE SCHEME OF LAW. 25. SCOPE OF THE LEGISLATION ON THE INTENTION OF TH E LEGISLATURE CANNOT BE ENLARGED WHEN THE LANGUAGE OF THE PROVISI ON IS PLAIN AND UNAMBIGUOUS. IN OTHER WORDS STATUTORY ENACTMENT S MUST ORDINARILY BE CONSTRUED ACCORDING TO ITS PLAIN MEAN ING AND NO WORDS SHALL BE ADDED, ALTERED OR MODIFIED UNLESS IT IS PLAINLY NECESSARY TO DO SO TO PREVENT A PROVISION FROM BEIN G UNINTELLIGIBLE, ABSURD, UNREASONABLE, UNWORKABLE OR TOTALLY IRRECON CILABLE WITH THE REST OF THE STATUTE.' 9. FOR THE REASONS DISCUSSED ABOVE, WE ANSWER THE QUES TION FORMULATED IN THE PRESENT CASE IN POSITIVE. ACCORDINGLY THE OR DER OF THE LEARNED TRIBUNAL, GAUHATI BENCH, GAUHATI, DT. 18TH APRIL, 2 001, PASSED IN ITA NO. 328/GAU/1999 AND ITA NO. 49/GAU/2000 IS NOT INTERFE RED WITH AND THE APPEAL IS DISMISSED. 25 . IN THE INSTANT CASE, THERE IS NO DISPUTE THAT THE ASSESSEE HAS FILED HIS RETURN OF INCOME FOR THE FIRST TIME ON 31.1.200 6. IT WAS BELATED RETURN OF INCOME FILED U/S 139(4) OF THE ACT. THERE IS AL SO NO DISPUTE THAT THE ASSESSEE HAS PURCHASED THE NEW ASSET BEFORE THE DAT E OF FILING RETURN OF ITA NO.1101 /11 18 INCOME U/S 139(4) OF THE ACT. THUS, IT IS SEEN THA T IT IS A CASE OF UTILIZATION OF CAPITAL GAINS BEFORE THE DATE OF FURNISHING RETU RN OF INCOME U/S 139(4) OF THE ACT. HENCE, AS PER THE RATIO LAID DOWN BY HON BLE GAUHATI HIGH COURT (REFERRED SUPRA), THERE IS NO REQUIREMENT FOR THE A SSESSEE HEREIN TO MAKE ANY DEPOSIT AS CONTEMPLATED U/S 54(2) OF THE ACT. 26. WE NOTICE THAT THE DECISION RENDERED BY HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. MS. JAGRITI AGGARWAL (SUPRA) AND THE DECISION RENDERED BY HONBLE GAUHATI HIGH COURT IN THE CASE OF CIT VS. RAJESH KUMAR JALAN (SUPRA) COMES TO THE SUPPORT OF THE ASSESSEE HEREIN. FURTHER SEC.54, BEING A BENEFICIAL PROVISION, IT IS WELL SETTLED PROPOSITION THAT IT REQUIRES LIBERAL INTERPRETATION . IN THIS REGARD, WE FEEL IT PERTINENT TO EXTRACT THE FOLLOWING OBSERVATIONS MAD E BY THE HONBLE GAUHATI HIGH COURT IN THE CASE OF RAJESH KUMAR JALAN (SUPRA):- THE ISSUE INVOLVED IN THE PRESENT APPEAL IS THE CL AIM FOR BENEFIT OF EXEMPTION FROM BEING CHARGED TO INCOME-TAX ON THE SALE OF PROPERTIES USED FOR RESIDENCE UNDER SECTION 54 OF THE INCOME T AX ACT, 1961. SECTION 54 OF THE INCOME-TAX ACT, 1961, IS A BENEFICIAL PRO VISION OF THE INCOME-TAX ACT, 1961 FOR THE ASSESSEE IN THE MATTER RELATING W ITH THE SALE OF PROPERTIES USED FOR RESIDENCE, IT APPEARS, FOR THE CONSTITUTIONAL GOAL OF PROVIDING RESIDENCE TO THE CITIZEN OF INDIA. IT IS FAIRLY WELL-SETTLED THAT IN CONSTRUING A BENEFICIAL ENACTMENT, THE VIEW THAT AD VANCES THE OBJECT OF THE BENEFICIAL ENACTMENT AND SERVES ITS PURPOSE MUS T BE PREFERRED TO THE ONE WHICH OBSTRUCTS THE OBJECTS AND PARALYSES THE P URPOSE OF THE BENEFICIAL ENACTMENT. IN THIS REGARD, WE MAY REFER TO THE DECISION OF THE APEX COURT IN KUNAL SINGH V. UNION OF INDIA [2003 4 SCC 524. HENCE, IN VIEW OF THE FACT THAT THE DEDUCTION ALLOW ED U/S 54 / 54F IS FOR THE BENEFIT OF THE ASSESSEES, WHICH WERE INTRODUCED TO ACHIEVE CONSTITUTIONAL GOALS AND FURTHER BY TAKING INTO CONSIDERATION THE FAVOURABLE DECISIONS RENDERED BY THE HIGH COURTS (REFERRED SUPRA), WE HO LD THAT, IN THE FACTS ITA NO.1101 /11 19 AND CIRCUMSTANCES OF THE INSTANT CASE, THERE IS NO REQUIREMENT FOR THE ASSESSEE TO MAKE ANY DEPOSIT AS STIPULATED IN SEC. 54(2) OF THE ACT. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD CIT(A) ON THIS ISSUE. 27. IN THE EARLIER PARAGRAPHS, WE HAVE NOTICED THA T THERE IS CONFUSION ABOUT THE SECTION UNDER WHICH THE DEDUCTION WAS SOU GHT TO BE CLAIMED BY THE ASSESSEE. THE LD CIT(A) HAS ALSO REFERRED TO B OTH THE SECTIONS, VIZ., SEC. 54 / SEC. 54F OF THE ACT. WE HAVE ALREADY NOT ICED THAT THE METHOD OF COMPUTATION OF QUANTUM OF DEDUCTION UNDER BOTH THE SECTIONS IS DIFFERENT. HENCE, WE ARE OF THE VIEW THE ISSUE RELATING TO COM PUTATION OF QUANTUM OF DEDUCTION UNDER PROPER SECTION NEEDS TO BE EXAMINED AT THE END OF THE ASSESSING OFFICER. ACCORDINGLY WE RESTORE THE MATT ER OF COMPUTATION OF QUANTUM OF DEDUCTION UNDER PROPER SECTION OF THE AC T TO THE FILE OF THE ASSESSING OFFICER, WHO SHALL COMPUTE THE DEDUCTION AFTER GIVING PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 28. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED. ( )0 () * 1) * ) 23 ORDER PRONOUNCED IN THE OPEN COURT ON THIS 23 RD MAY, 2014. / * -.' ! 4 50 23 RD MAY,2014 . * 6 SD/- SD/- ( ) (VIJAY PAL RAO) ( . . ) (B.R.BASKARAN ) / JUDICIAL MEMBER ! ! ! ! / ACCOUNTANT MEMBER MUMBAI ; 5 DATED 23/05/2014 &. . /PKM , . / PS ITA NO.1101 /11 20 / / / / * ** * &) &) &) &) 8 ') 8 ') 8 ') 8 ') / COPY OF THE ORDER FORWARDED TO : / / / / / BY ORDER, 9 99 9 / 2 2 2 2 ( ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. #% / THE APPELLANT 2. &'#% / THE RESPONDENT. 3. : ( ) / THE CIT(A), MUMBAI. 4. : / CIT 5. ;6 &) , , / DR, ITAT, MUMBAI 6. 6< = / GUARD FILE. ') &) //TRUE COPY//