MAHENDRA RAJNIKANT ZAVERI, Jaipur V. ITO, Jaipur

ITA 1117/JPR/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2072 (ITAT-JAIPUR)
• Duration Of Justice: 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 19-05-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 16-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA CIT DHK
• Assessee Lawyers: S R SHARMA; R K BHATRA
• Keywords: Unexplained investment; Document seized; Bonafide belief; Documents seized
• Section: 54F; 153A; 54; 139

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH HKKXPAN] YS[KK LNL; ,OA JH DQY HKKJR , U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM & SHRI KUL BHARAT, JM VK;DJ VIHY LA-@ ITA NO. 1117/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2012-13 MAHENDRA RAJNIKANT ZAVERI 2683, SURATWALA BUILDING, MSB RASTA JOHARI BAZAR, JAIPUR CUKE VS. ITO WARD-2-1 JAIPUR PAN NO.: AAAPZ3682R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI S.R.SHARMA & SHRI R.K. BHATRA (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A.VERMA (ADDL.CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 05/09/2017 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 08/09/2017 VKNS'K@ ORDER PER: BHAGCHAND, A.M. THIS APPEAL FILED BY THE ASSESSEE EMANATES FROM T HE ORDER OF THE LD. CIT(A)-I, JAIPUR DATED 28/09/2016 FOR A.Y. 2012 -13 WHEREIN THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE LD. CIT(A) IS WRONG, UNJUST AND HAS ERRED IN LAW IN UPHOLDING FINDING RECORDED BY THE ASSESSING OFFICER THAT DEPOSIT BY THE APPELLANT IN CAPITAL GAIN ACCOUNT OF RS. 1,25,00,000/- ON 28.03.2013 FOR CONSTRUCTION OF RESIDENTIAL HOUSE WITHIN EXTENDED DUE DATE OF 31-03-2014 U/S 139(4) ITA 1117/JP/2016_ MAHENDRA RAJNIKANT ZAVERI, JAIPUR VS. ITO, JAIPUR 2 OF THE I.T. ACT, 1961 CANNOT BE CONSIDERED AS INVESTMENT FOR THE PURPOSE OF DEDUCTION IN ACCORDANCE WITH SECTION 54F OF THE I.T.ACT, 1961 FROM LONG TERM CAPITAL GAIN AND THEREBY CONFIRMING THE ACTION OF LD. AO IN ALLOWING DEDUCTION U/S 54F TO RS. 1,08,53,775/- AS AGAINST RS. 2,32,23,657/- CORRECTLY CLAIMED BY THE ASSESSEE. 2. THAT THE APPELLANT CRAVES THE PERMISSION TO ADD TO OR AMEND TO ANY OF THE ABOVE GROUNDS OF APPEAL OR TO WITHDRAW ANY OF THEM. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM FIRM(S) M/S RAJNIKANT NEM CHAND & CO. A ND GOREGAON GAN AGENCY. THE ASSESSEE DURING THE YEAR SOLD A LAND AT 5/B, LAXMI INDUSTRIAL ESTATE, LINK ROAD, GOREGAON, MUMBAI ON 21.10.2011 F OR A CONSIDERATION OF RS. 3,65,25,000/-. THE ASSESSEE DECLARED LONG TE RM CAPITAL GAIN OF RS. 3,53,66,100/- AND CLAIMED EXEMPTION U/S 54EC AT RS. 50,00,000/- AND 54F AT RS. 2,32,23,657/-. THE SALE OF LAND WAS EFFE CTED BY REGISTERED DEED OF CONVEYANCE CUM LEASE EXECUTED BETWEEN SELLE R(S) AND PURCHASER VIDE DEED DATED 09.09.2011 AND PRESENTED BEFORE SUB-REGISTRA R DISTT. BORIVALI ON 09.09.2011 MUMBAI. THE ASSESSING OFFICE R ACCEPTED THE CLAIM OF DEDUCTION U/S 54EC OF THE ACT FOR RS. 50,00,000/ -. HOWEVER, HE RESTRICTED THE DEDUCTION TO RS. 1,10,25,000/- U/S 54F OF THE ACT BEING AMOUNT DEPOSITED IN CAPITAL GAIN DEPOSIT SCHEME ON 28.09.2012. HE ALSO CLAIMED THE DEDUCTION OF RS. 1,25,00,000/- DEPOSITE D ON 28.03.2013 ITA 1117/JP/2016_ MAHENDRA RAJNIKANT ZAVERI, JAIPUR VS. ITO, JAIPUR 3 WHICH WAS DISALLOWED. THE REASON FOR NOT ALLOWING T HE CLAIM THE ASSESSEE WAS THAT IT WAS NOT DEPOSITED BEFORE DUE DATE OF FI LING RETURN OF INCOME U/S 139(1) OF I.T. ACT, 196. THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE. 3. THE ONLY ISSUE RAISED BY THE ASSESSEE IN THE AP PEAL IS FOR NOT ALLOWING THE DEDUCTION U/S 54F OF THE I.T. ACT IN F ULL AS THE ASSESSEE CLAIMED DEDUCTION OF RS. 2,32,23,657/- AND AO RESTR ICTED IT TO RS. 1,08,53,775/-. 4. THE LD. AR SUBMITTED THAT THIS ISSUE IS SQUARELY COVERED BY VARIOUS DECISIONS THE HONBLE ITAT, JAIPUR BENCH INCLUDING THE CASE OF SMT. MAYA DEVI SHARMA VS. ACIT DATED 25/07/2017 AND THE RELEV ANT PAGES ARE 24 TO 34 OF THE ORDER. HE ALSO SUBMITTED THAT THE HONB LE ITAT, JAIPUR HAS ALSO CONSIDERED THE DECISION OF HONBLE MUMBAI HIGH COUR T IN THE CASE OF HUMAYUN SULEMAN MERCHANT VS. CCIT [2006] 73 TAXMANN .COM 2(BOMBAY). THE LD. AR ALSO PLACED RELIANCE ON THE D ECISIONS OF HONBLE GAUHATI HIGH COURT, IN THE CASE OF CIT VS. RAJESH K UMAR (2006) 286 ITR 274 DATED 09.08.2006. HE ALSO RELIED ON THE DECISI ON OF ITAT PUNE, BENCH IN THE CASE OF MAHESH NEMICHANDRA GANESHWADE VS. ITO REPORTED IN [2012] 21 TAMANN.COM 136 (PUNE). THE LD. AR ALSO PLACED RELIANCE ON ITA 1117/JP/2016_ MAHENDRA RAJNIKANT ZAVERI, JAIPUR VS. ITO, JAIPUR 4 BOARDS CIRCULAR NO. 791 DATED 02.06.2000. THE LD. A R ALSO FILED THE WRITTEN SUBMISSIONS AS UNDER:- IT IS SUBMITTED THAT THE ASSESSEE PRESENTED THE DE ED OF CONVEYANCE CUM LEASE DEED FOR TRANSFER OF PROPERTY ON 09.09.20111 BY RECEIVING PART CONSIDERATION BEFORE THAT DATE AND PART BY RECEIVING POST DATED CHQUES AS EVIDENT FROM REGISTERED SALE DEED AS DETAILED HEREUNDER:- DATE CHEQUE NO. AMOUNT (RS.) 12.03.2011 RTCG 12,50,000/- 31.03.2011 931042-HDFC BANK 12,50,000/- 11.10.2011 202328-S.V. CO-OP. BANK 52,75,000/- 11.02.2012 202333-S.B.CO-OP. BANK 1,43,75,000/- 11.06.2012 202337-S.B.CO.OP.BANK 1,43,75,000/- HOWEVER AT THE REQUEST OF PURCHASER THE ASSESSEE REQUIRED TO PRESENT THE CHEQUE NO. 202333 DATED 11. 02.2012 FOR RS. 1,43,75,000/-19.04.2012 AND THE SAME WAS CR EDITED IN HIS BANK A/C ON 21.04.2012. SIMILARLY AT THE REQ UEST OF PURCHASER THE ASSESSEE REQUIRED TO ACCEPT THE CHEQU E NO. 202378 DATED 18.10.2012 IN PLACE OF CHEQUE NO. 2023 37 DATED 11.06.2012 WHICH WAS CREDITED IN HIS BANK A/C ON 20.10.2012. THUS ASSESSEE RECEIVED MAJOR PART OF CONSIDERATION FOR SALE MUCH AFTER DATE OF CONVEYANC E I.E. TRANSFER OF PROPERTY AND RS. 1,43,75,000/- AFTER DU E DATE OF FILING OF RETURN. IN VIEW OF THE ABOVE FACTS OF THE CASE AND FROM POSITIONS OF LAW THE ASSESSEE ON SHOW CAUSE NOTICE OF LD. A.O. FILED HIS EXPLANATION WHICH WAS REJECTED BY LD . A.O. IN THIS CONNECTION IT IS SUBMITTED THAT LD. A.O. HAS W HILE INVOKING PROVISIONS OF SECTION 54F (4) HAS NOT PROP ERLY APPRECIATED THE POSITION OF LAW WHILE DISALLOWING T HE CLAIM OF DEDUCTION U/S 54F OF I.T. ACT RIGHTLY CLAIMED BY AS SESSEE. THE ITA 1117/JP/2016_ MAHENDRA RAJNIKANT ZAVERI, JAIPUR VS. ITO, JAIPUR 5 SECTION 54F MANDATES THAT THE AMOUNT OF NET CONSIDE RATION WHICH IS NOT APPROPRIATED BY THE ASSESSEE TOWARDS T HE PURCHASE OR CONSTRUCTION OF NEW ASSET WITHIN SPECIF IED PERIOD(S) U/S 54F(2) BEFORE THE DATE OF FURNISHING THE RETURN OF INCOME U/S 139 SHALL BE DEPOSITED BY HIM BEFORE FURNISHING SUCH RETURN IN CAPITAL GAIN DEPOSIT SCHE ME. THE PROVISIONS OF SECTION 54F (4) ARE AKIN TO SECTION 5 4 (2) AND THE GAUHATI HIGH COURT IN CASE OF CIT VS. RAJESH KU MAR JALAN (2006) 286 ITR 274 WHILE INTERPRETING SECTION 54 (2 ) WHICH IS EQUALLY APPLICABLE FOR PROVISIONS OF SECTION 54 F (4) HELD AS UNDER:- 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 A CT, 1961, IS MENTIONED IN S. 54 (2) IN THE CONTEXT THAT THE UNUT ILIZED PORTION OF THE CAPITAL GAIN ON THE SALE OF PROPERTY USED FOR RESIDENCE SHOULD BE DEPOSITED BEFORE THE DATE OF FU RNISHING THE RETURN OF INCOME-TAX UNDER S. 139 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, 196 1. UNDER SUB-S. (4) OF S. 139 OF THE IT ACT ANY PERSON WHO H AS NOT FURNISHED A RETURN WITHIN THE TIME ALLOWED TO HIM UNDER SUB- S. (1) OF S. 142 MAY FURNISH THE RETURN FOR ANY PRE VIOUS YEAR AT ANY TIME BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT YEAR OR BEFORE THE COMPLETION O F THE ASSESSMENT WHICHEVER IS EARLIER. SUCH BEING THE SIT UATION, IT IS THE CASE OF THE RESPONDENT/ASSESSEE THAT THE RESPONDENT/ASSESSEE COULD FULFIL THE REQUIREMENT UN DER S. 54 OF THE IT ACT FOR EXEMPTION OF THE CAPITAL GAIN FR OM BEING CHARGED TO INCOME TAX ON THE SALE OF PROPERTY USED FOR RESIDENCE UPTO 30 TH MARCH, 1998, IN AS MUCH AS THE RETURN OF INCOME TAX FOR THE ASST. YR. 1997-98 COULD BE FURNI SHED BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE R ELEVANT ASSESSMENT YEAR OR BEFORE THE COMPLETION OF THE ASS ESSMENT WHICHEVER IS EARLIER UNDER SUB-S. (4) OF S. 139 OF THE IT ACT, 1961. THE SIMILAR INTERPRETATION OF SECTION 54 (2) BY KARNATAKA HIGH COURT IN CASE OF FATHIMA BAI VS. I.T .O. (2009) 32 DTR (KAR.) 243. THE VARIOUS ITAT BENCHES FOLLOWE D THE SAID JUDGMENTS IN CASE OF CIT VS. RAJESH KUMAR JALA N AND FATHIMA BAI VS. I.T.O. WHILE DECIDING VARIOUS CASE. IN CASE OF ITA 1117/JP/2016_ MAHENDRA RAJNIKANT ZAVERI, JAIPUR VS. ITO, JAIPUR 6 NIPUN MEHROTRA VS. ACIT ITAT, BANGALORE BENCH IN (2008)110 ITR 520 (BANG.) HELD THE SAME VIEW. IN A RECENT DECISION IN CASE OF G. RAMESH VS. ITO CHENNAI (2016 ) 159 ITD 633 WHEREIN IT IS HELD THAT AS PER SEC. 54F(4), IN THE EVENT OFTHE ASSESSEE NOT INVESTING THE CAPITAL GAIN S EITHER IN PURCHASING THE RESIDENTIAL HOUSE OR IN CONSTRUCTING A RESIDENTIAL HOUSE WITHIN THE PERIOD STIPULATED IN S EC. 54F (1), IF THE ASSESSEE WANTS THE BENEFIT OF SEC. 54F, THEN HE SHOULD DEPOSIT THE SAID CAPITAL GAINS IN AN ACCOUNT WHICH IS DULY NOTIFIED BY THE CENTRAL GOVERNMENT. IN OTHER WORDS, IF HE WANTS CLAIM OF EXEMPTION FROM PAYMENT OF INCOME-TAX BY RETAINING THE CASH, THEN THE SAID AMOUNT IS TO BE I NVESTED IN THE SAID ACCOUNT NOTIFIED BY CENTRAL GOVERNMENT ON THIS BEHALF. IF THE INTENTION IS NOT TO RETAIN CASH BUT TO INVEST IN CONSTRUCTION OR ANY PURCHASE OF THE PROPERTY AND IF SUCH INVESTMENT IS MADE WITHIN THE PERIOD STIPULATED THE REIN I.E. SECTION 139 (4), THEN SECTION 54F (4) IS NOT AT ALL ATTRACTED AND THEREFORE, THE CONTENTION THAT THE ASSESSEE HA S NOT DEPOSITED THE AMOUNT IN THE BANK ACCOUNT AS STIPULA TED AND THEREFORE, HE IS NOT ENTITLED TO THE BENEFIT IS ALS O NOT CORRECT RELIANCE WAS ALSO PLACED ON JUDGMENTS OF KARNATAKA HIGH COURT IN CASE OF CIT VS. K. RAM CHANDRA RAO (2015) 230 TAXMAN 334 AND JUDGMENT IN CASE OF DR. XAVIER J. PU LLIKAL VS. DCIT (2014) 104 DTR 134 (KER.) THE LD. A.O. IN ASSESSMENT ORDER RELIED ON JUDGMENT OF ITAT, DELHI BENCH IN CASE OF TARANBIR SAWHNEY VS. D CIT (2006) 5 SOT 417. THE CASE WAS DECIDED BEFORETHE JU DGMENT OF GAUHATI HIGH COURT IN CASE OF CIT VS. RAJESH KUM AR JALAN HENCE CANNOT BE APPLIED. THIS HAS BEEN NOTICED BY I TAT, BANGALORE BENCH IN CASE OF NIPUN MEHROTRA VS. ACIT (SUPRA) AND HONBLE ITAT HELD THE SAME VIEW. THE CIT(A) HAS SIMPLY FOLLOWED THE JUDGMENT OF BOMBAY HIGH COURT IN CASE OF HUMAYUN SULEMAN MERCHA NT (SUPRA) IN DECIDING THE APPEAL WHILE THE ASSESSEE C ITED THE JUDGMENT OF CIT VS. REJESH KUMAR JALAN (SUPRA) & F ATHIMA BAI VS. I.T.O. (SUPRA) AND VARIOUS ITAT JUDGMENTS W HICH HE DID NOT APPRECIATED AT ALL. IT IS SUBMITTED THAT DE CISION IN HUMAYUN SULEMAN MERCHANT (SUPRA0 WAS INCURIAM IN AS MUCH AS IT HAD NOT APPRECIATED THE JUDGMENT OF GUW AHATI HIGH COURT IN CIT VS. RAJESH KUMAR JALAN AND OF KA RNATAKA ITA 1117/JP/2016_ MAHENDRA RAJNIKANT ZAVERI, JAIPUR VS. ITO, JAIPUR 7 HIGH COURT IN CASE OF FATIMA BAI VS. I.T.O. IT IS S UBMITTED THAT WHEN JUDGMENTS OF TWO HIGH COURTS AND VARIOUS ITAT BENCHES ARE IN FAVOUR OF ASSESSEE AND THRE BEING NO JUDGMENT OF SUPREME COURT THEN CIT (A) OUGHT TO HAV E FOLLOWED THE JUDGMENTS WHICH ARE IN FAVOUR OF ASSES SEE IN PREFERENCE TO UNFAVOURABLE JUDGMENT OF BOMBAY HIGH COURT IN CASE OF HUMAYUN SULEMAN MERCHANT. THE PROVISIONS OF SECTION 54 (2)/54F(4) HAVE BEEN JUDICIALLY INTERPRE TED BY HONBLE HIGH COURTS IN CIT VS. RAJESH KUMAR JALAN & FATIMA BAI VS. I.T.O. AND ONLY THOSE JUDGMENTS WERE AVAIL ABLE BEFORE ASSESSEE AT THE RELEVANT TIME AND HE ACCORDI NGLY ACTED AT THAT TIME. IN VIEW OF THE ABOVE THE ASSESSEE HAVING DEPOSITED RS. 1,25,00,000/- IN THE CAPITAL DEPOSIT ACCOUNT BEFORE DUE DATE OF FURNISHING RETURN U/S 139 (4) I.E. 31.03.2013 AN D SO ENTITLED FOR DEDUCTION U/S 54F FOR SAID AMOUNT AND ADDITION OF RS. 1,22,39,882/- MADE TO DECLARED LONG TERM CAPITA L GAIN IN THE HANDS OF ASSESSEE DESERVES TO BE DELETED. WITHOUT PREJUDICE TO ABOVE IT IS SUBMITTED THAT AS ALREADY STATED THE ASSESSEE RECEIVED A MAJOR PART O F CONSIDERATION (RS. 1,43,75,000/-) ON 20.10.2012 I.E . AFTER THE DUE DATE OF FURNISHING RETURN U/S 139 (1) I.E. 30.0 9.2012 AND SO IT WAS IMPOSSIBLE FOR HIM TO DEPOSIT THE MONEY I N CAPITAL GAIN DEPOSIT A/C BEFORE THAT DATE. THE SIMILAR ISSU E CAME UP FOR CONSIDERATION BEFORE PUNE TRIBUNAL IN CASE OF M AHESH NEMI CHANDRA GENESHWADE VS. I.T.O. (2012) 73 DTR/14 7 TTJ 488. THE HONBLE ITAT TOOK INTO CONSIDERATION T HE CBDT CIRCULAR NO. 791 DATED 02.06.2000 AND APPRECIATED T HE IMPOSSIBILITY OF THE ASSESSEE BEING ABLE TO INVEST THE AMOUNT IN SPECIFIED ASSETS AND HELD THAT PERIOD OF 6 MONTH S FOR THE PURPOSE OF INVESTMENT IN SPECIFIED ASSETS MUST BE R ECKONED FROM THE DATE OF RECEIPT OF CONSIDERATION. THE SAID JUDGMENT OF HONBLE ITAT HELD AS UNDER:- THE ASSESSEE ENTERED INTO A DEVELOPMENT AGREEMENT ON 12.07.2005 IN WHICH THE CONSIDERATION WAS FIXED AT RS. 2.50 CRORES. A CORRECTION DEED WAS ENTERED INTO ON 2.7.2007 IN WHICH THE SALE CONSIDERATION WAS INCREASED TO RS . 4.90 CRORES. THE ASSESSEE INVESTED RS. 50 LAKHS IN SECTI ON 54EC BONDS ON 3.8.2007 AND 27.10.2007. THE ASSESSING OFF ICER ITA 1117/JP/2016_ MAHENDRA RAJNIKANT ZAVERI, JAIPUR VS. ITO, JAIPUR 8 HELD THAT THE DATE OF TRANSFER WAS 12.7.2005 AND AS THE SECTION 54EC INVESTMENTS HAD BEEN MADE BEYOND A PER IOD OF 6 MONTHS FROM THE DATE OF TRANSFER, THE EXEMPTION W AS NOT AVAILABLE. THE ASSESSEE CLAIMED THAT AS IT WAS IMPO SSIBLE FOR HIM TO INVEST WITHIN 6 MONTHS FROM THE DATE OF TRAN SFER, THE PERIOD OF SIX MONTHS HAD TO BE RECKONED FROM THE DA TE OF RECEIPT OF CONSIDERATION. HELD BY THE TRIBUNAL: THOUGH SECTION 54EC REQUIRES THE INVESTMENT TO BE MADE WITHIN 6 MONTHS OF THE DATE OF TRANSFER, A TEC HNICAL INTERPRETATION CANNOT BE ADOPTED BUT IT HAS TO BE I NTERPRETED HAVING REGARD TO THE PURPOSE AND SPIRIT OF THE SECT ION. IN CIRCULAR NO. 791 DATED 2.6.2000 THE CBDT HELD IN TH E CONTEXT OF CAPITAL GAINS ARISING UNDER SECTION 45 (2), THAT THROUGH THE TRANSFER ARISES IN THE YEAR OF CONVERSION OF A CAPI TAL ASSET INTO STOCK IN TRADE, THE PERIOD OF SIX MONTHS FOR INVEST MENT UNDER SECTION 54EC HAS TO BE RECKONED FROM THE DATE OF SA LE OF THE STOCK-IN TRADE. THE CBDT APPRECIATED THE IMPOSSIBI LITY OF THE ASSESSEE BEING ABLE TO INVEST THE AMOUNT IN SPE CIFIED ASSETS WITHIN SIX MONTHS FROM THE DATE OF TRANSFER. THIS INTERPRETATION OF THE CBDT SUPPORTS THE ASSESSEES CLAIM THAT WHERE THE CONSIDERATION IS RECEIVED MUCH AFTER THE DATE OF TRANSFER AND IT IS NOT POSSIBLE TO INVEST THE SAME WITHIN 6 MONTHS OF THE DATE OF TRANSFER, THE PERIOD OF SIX M ONTHS MUST BE RECKONED FROM THE DATE OF RECEIPT OF CONSIDERATI ON. (A.Y. 2006-07). THE LD. CIT(A) DISMISSED THE ALTERNATIVE CONTENTS B Y SIMPLY STATING THAT THE ABOVE ITAT DECISION WAS REN DERED U/S 54EC OF ACT AND THUS NOT APPLICABLE ON THE FACTS OF THE CASE IN RESPECT TO DEDUCTION U/S 54F. THE ORDER OF CIT(A ) IS THUS WITHOUT APPRECIATING THE SPIRIT OF LAW IN THE SAID CBDT CIRCULAR AND ITAT JUDGMENT. IN CASE OF CBDT VS. ADITYA V. BIRLA (1988) 170 ITR 377 (SC) THE COURT OBSERVED THAT AN EXEMPTION PROVISION MUST BE INTERPRETED AS THE SITUATION DEMANDS AND NOT IN A T ECHNICAL SENSE. IN CASE OF CIT VS. J.H. GOTLA (1985) 156 ITR 323 (SC) THE COURT OBSERVED THAT INTERPRETATION OF TAXING ST ATUTE WOULD SUBMIT TO EQUITABLE CONSTRUCTION WHERE STRICT LITER AL CONSTRUCTION LEADS TO UNJUST RESULT. ITA 1117/JP/2016_ MAHENDRA RAJNIKANT ZAVERI, JAIPUR VS. ITO, JAIPUR 9 THUS AS THE ASSESSEE RECEIVED SAID CONSIDERATION ON 20.10.2012 AND DEPOSITED THE SAME IN CAPITAL GAIN D EPOSIT A/C ON 28.03.2013 THE RELIEF U/S 54F (4) SHOULD BE ALLOWED TO ASSESSEE AS IN SUCH CASE IT WAS IMPOSSIBLE FOR HIM TO DEPOSIT THE SUM IN CAPITAL GAIN DEPOSIT A/C BEFORE DUE DAT E OF FILING OF RETURN I.E. 30.09.2012. THE ADDITION OF RS. 1,23 ,39,802/- MADE TO DECLARED LONG TERM CAPITAL GAIN IN THE HAN DS OF ASSESSEE DESERVES TO BE ALLOWED ON THIS GROUND ALSO . IT IS, THEREFORE, PRAYED THAT THE DEDUCTION OF RS. 1,23,39,802/- CLAIMED BY ASSESSEE U/S 54F MAY KINDL Y BE ALLOWED TO HIM. 5. ON THE OTHER HAND, LD. DR RELIED ON THE ORDER OF AUTHORITIES BELOW. 6. WE HAVE HEARD BOTH THE SIDES. THE CONVEYANCE DEE D FOR TRANSFER OF PROPERTY WAS PRESENTED ON 09.09.2011 AND REGISTERED ON 20.10.2011 BY SUB-REGISTRAR, BORIVALI. PART OF THE CONSIDERATION WAS RECEIVED BY THAT DATE BY ASSESSEE. THE DETAILS OF CHEQUES ARE AS UND ER: DETAILS OF CONSIDERATION AND POST DATED CHEQUES. DATE CHEQUE NO. AMOUNT (RS.) 12-03-2011 RTCG 12,50,000/- 31-03-2011 931042-HDFC BANK 12,50,000/- 11 - 10 - 2011 202328 - S.V. CO - OP. BANK 52,75,000/ - 11-02-2012 202333-S.B. CO. OP. BANK 1,43,75,000/- 11-06-2012 202337- S.B. CO. OP. BANK 1,43,75,000/- ON THE REQUEST OF THE PURCHASER CHEQUE NO. 202333 D ATED 11.02.2012 FOR RS. 1,43,75,000/- PRESENTED ON 19.04.2012 AND THE S AME WAS CREDITED IN THE ASSESSEE ACCOUNT ON 21.04.2012. SIMILARLY AT TH E REQUEST OF PURCHASER ITA 1117/JP/2016_ MAHENDRA RAJNIKANT ZAVERI, JAIPUR VS. ITO, JAIPUR 10 THE ASSESSEE ACCEPTED THE CHEQUE NO. 202378 DATED 1 8.10.2012 IN PLACE OF CHEQUE NO. 202337 DATED 11.06.2012. THE SAME WAS CREDITED TO THE BANK A/C OF THE ASSESSEE ON 20.10.2012. THESE FACT S ESTABLISHES THAT ASSESSEE RECEIVED MAJOR PART OF SALE CONSIDERATION MUCH AFTER DATE OF CONVEYANCE DEED. ASSESSEE RECEIVED RS. 1,43,75,000/ -EVEN AFTER DUE DATE OF FILING OF RETURN OF INCOME. 7. ADMITTEDLY, THE SALE CONSIDERATION RECEIVED BEYO ND THE DATE OF TRANSFER OF THE ASSET IN SUCH A FACTUAL SITUATION T HE HONBLE ITAT, PUNE A BENCH WHILE DECIDING THE ITA NOS. 594 TO 597/PN/201 0 IN THE CASE OF MAHESH NEMICHANDRA GANESHWADE VS. ITO IN ITS ORDER DATED 29 TH MARCH, 2012 REPORTED IN (2012) 17 ITR_TRIB 116 HAS HELD, T HE CLAIM OF THE ASSESSEE ALLOWABLE. THE HONBLE SUPREME COURT IN TH E CASE OF CIT, BANGALORE V. J.H.GOTLA REPORTED IN [1985] 156 ITR 3 23 (SC) HELD THAT IF A STRICT AND LITERAL CONSTRUCTION OF THE STATUTE LEAD S TO AN ABSURD RESULT, I.E., A RESULT NOT INTENDED TO BE SUBSERVED BY THE OBJECT OF THE LEGISLATION ASCERTAINED FROM THE SCHEME OF THE LEGISLATION, THE N, IF ANOTHER CONSTRUCTION IS POSSIBLE APART FROM THE STRICT LITE RAL CONSTRUCTION, THEN, THAT CONSTRUCTION SHOULD BE PREFERRED TO THE STRICT LITE RAL CONSTRUCTION. THE HONBLE COURT HAS HELD THAT THOUGH EQUITY AND TAXAT ION ARE OFTEN STRANGERS, ATTEMPTS SHOULD BE MADE THAT THESE DO NO T REMAIN ALWAYS SO AND IF A CONSTRUCTION RESULTS IN EQUITY RATHER THAN IN INJUSTICE, THEN SUCH ITA 1117/JP/2016_ MAHENDRA RAJNIKANT ZAVERI, JAIPUR VS. ITO, JAIPUR 11 CONSTRUCTION SHOULD BE PREFERRED TO THE LITERAL CON STRUCTION. THE HONBLE SUPREME COURT IN THE CASE OF CIT. WEST BENGAL 1. V. VEGETABLE PRODUCTS LIMITED., EXPRESS NEWSPAPERS PVT. LIMITED : INTERVE NER & ORS HELD THAT IF TWO REASONABLE CONSTRUCTION OF TAXING PROVISION OF SERVING THAT CONSTRUCTION WHICH FAVOUR OF THE ASSESSEE MUST BE A DOPTED. THIS IS A WELL ACCEPTED RULE OF CONSTRUCTION RECOGNIZED BY HONBLE SUPREME COURT IN SEVERAL DECISIONS. THE HONBLE GAUHATI HIGH COURT IN THE CASE OF CIT V. RAJESH KUMAR JALAN [2006] 286 ITR (GAU) HELD AS UND ER: FROM A PLAIN READING OF SUB-SECTION (2) OF SECTION 54 OF THE INCOME-TAX ACT, 1961, IT IS CLEAR THAT ONLY SECTION 139 OF THE INCOME-TAX ACT, 1961, IS MENTIONED IN SECTION 54(2) IN THE CONTEXT THAT THE UNUTILIZED PORTION OF THE CAPITAL GAIN ON THE SALE OF PROPERTY USED FOR RESIDENCE SHOULD BE DEPOSITED BEFORE THE D ATE OF FURNISHING THE RETURN OF THE INCOME-TAX UNDER SECTI ON 139 OF THE INCOME-TAX ACT. SECTION 139 OF THE INCOME-TAX ACT, 1961, CANNOT BE MEANT ONLY SECTION 139(1) BUT IT MEANS ALL SUB-S ECTIONS OF SECTION 139 OF THE INCOME-TAX ACT, 1961. UNDER SUB- SECTION (4) OF SECTION 139 OF THE INCOME-TAX ACT ANY PERSON WHO HA S NOT FURNISHED A RETURN WITHIN THE TIME ALLOWED TO HIM U NDER SUB-SECTION (1) OF SECTION 142 MAY FURNISH THE RETURN WITHIN TH E TIME ALLOWED TO HIM UNDER SUB-SECTION (1) OF SECTION 142 MAY FURNIS H 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 T HE COMPLETION OF THE ASSESSMENT YEAR WHICHEVER IS EARLIER. SUCH B EING THE SITUATION, IT IS THE CASE OF THE RESPONDENT/ASSESSE E THAT THE RESPONDENT/ASSESSEE COULD FULFIL THE REQUIREMENT UN DER SECTION 54 OF THE INCOME-TAX ACT FOR EXEMPTION OF THE CAPITAL GAIN FROM BEING CHARGED TO INCOME-TAX ON THE SALE OF PROPERTY USED FOR RESIDENCE UP TO MARCH 30, 1998, INASMUCH AS THE RETURN OF INC OME-TAX FOR THE ASSESSMENT YEAR 1997-98 COULD BE FURNISHED BEFORE T HE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT YE AR OR BEFORE THE COMPLETION OF THE ASSESSMENT WHICHEVER IS EARLI ER UNDER SUB- SECTION (4) OF SECTION 139 OF THE INCOME-TAX ACT, 1 961. ITA 1117/JP/2016_ MAHENDRA RAJNIKANT ZAVERI, JAIPUR VS. ITO, JAIPUR 12 8. IN A RECENT DECISION OF ITAT JAIPUR, CO-ORDINAT E BENCH IN THE CASE OF SMT. MAYA DEVI SHARMA THE SIMILAR ISSUE HAS BEEN DECIDED BY THE LD. CIT(A) BY HOLDING AS UNDER:- WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED TH E MATERIAL AVAILABLE ON RECORD. AFTER EXAMINING THE M ATERIAL ON RECORD AND ORDERS OF THE LOWER AUTHORITIES, WE FIND THAT IT IS AN UNDISPUTED FACT THAT ASSESSEE HAD RECEIVED ON-MO NEY FROM THE SALE OF PLOT IN TARU CHHAYA NAGAR WHICH WA S REINVESTED IN THE NEW HOUSE. THIS FACT WAS ALSO ADM ITTED BY ASSESSEES HUSBAND IN THE STATEMENT RECORDED U/S 13 2(4) OF THE ACT AND ALSO WHEN THE ASSESSEE FILED THE RETURN OF INCOME IN RESPONSE TO THE NOTICE U/S 153A, THE ADDITIONAL INCOME WAS DISCLOSED ON THE BASIS OF THE INVESTMENTS MADE IN V ARIOUS YEARS. HOWEVER THE AO ASSESSED THE INCOME OF THE AS SESSEE IN THE YEAR WHEN THE ON-MONEY WAS RECEIVED FROM THE SALE OF PLOT WHICH ACTION WAS NOT DISPUTED BY THE ASSESSEE. THE AO HERSELF IN THE ORDER AT PAGE 17 TABULATED THE DETAI LS OF DATE- WISE INVESTMENT MADE BY THE ASSESSEE IN THE ACQUISI TION OF NEW HOUSE FOR WHICH THE REFERENCE OF THE SEIZED DOC UMENTS AND STATEMENTS OF HER HUSBAND WERE ALSO MENTIONED. THE MAIN REASON FOR NOT ALLOWING THE CLAIM BY THE AO WA S THAT THE RETURN U/S 153 A OF THE ACT WAS NOT FILED IN TI ME (PAGE 16 OF ASSESSMENT ORDER) AND THERE WAS NO RETURN FILED U/S 139(1). IN THIS REGARD, IT WAS SUBMITTED BY THE LD. AR THAT ASSESSEE HAD NOT FILED THE RETURN U/S 139(1) OF THE ACT UNDER THE BONAFIDE BELIEF THAT SINCE THE ENTIRE AMOUNT OF SALES CONSIDERATION WAS INVESTED IN THE ACQUISITION OF NE W HOUSE, THEREFORE AFTER DEDUCTION U/S 54F THERE WOULD REMAI N NO TAXABLE INCOME. THEREFORE SHE WAS NOT REQUIRED TO F ILE THE RETURN OF INCOME. REGARDING THE ALLOWABILITY OF CLA IM 54F FOR BELATED RETURN FILED U/S 153A, IT IS SUBMITTED THAT SUB-SECTION 4 OF SECTION 54F PROVIDES RETURN FILED U/S 153A, IT IS SUBMITTED THAT SUB-SECTION 4 OF SECTION 54F PROVIDE S THAT THE AMOUNT OF SALE CONSIDERATION HAS TO BE APPROPRIATED BEFORE THE DATE OF FURNISHING RETURN U/S 139 OF THE ACT AN D THERE IS NO MENTIONED OF ANY SUB SECTION OF SECTION 139 OF T HE ACT. ACCORDING TO LD. AR OF THE ASSESSEE, THE INVESTMENT WAS MADE BEFORE OF 31.03.2009 I.E. THE TIME LIMIT PROVI DED U/S ITA 1117/JP/2016_ MAHENDRA RAJNIKANT ZAVERI, JAIPUR VS. ITO, JAIPUR 13 139(4), THE CLAIM OF THE ASSESSEE U/S 54F WAS RIGHT LY ALLOWED BY THE LD. CIT(A). FOR THIS PROPOSITION RELIANCE IS PLACED ON THE FOLLOWING DECISIONS: [2006] 286 ITR (GAU) CIT V. RAJESH KUMAR JALAN [2011] 339 ITR 610 (P & H) CIT V. MS. JAGRITI AGGAR WAL ACIT V. SMT. SAPNA DIMRI ITA NO. 151/DEL/2012 [ITAT DEL0 NIPUN MEHROTRA VS. ACIT (2008) 110 ITD 520 REGARDING THE OBSERVATION OF THE AO THAT NO EVIDENC E WAS FOUND FOR PAYMENT OF ON-MONEY AT THE TIME OF ACQUIS ITION OF NEW PROPERTY, IT IS SUBMITTED BY THE AR THAT IN THE SEIZED DOCUMENTS, EVIDENCES WERE FOUND FOR THE RECEIPT OF ON- MONEY AND SUBSEQUENT INVESTMENT IN THE ACQUISITION OF NEW PROPERTIES. THE HUSBAND OF THE ASSESSEE SHRI R.K. S HARMA IN HIS PRELIMINARY STATEMENT RECORDED DURING THE COURS E OF SEARCH U/S 132(4) HAD ALSO ADMITTED THE UNEXPLAINED INVESTMENT IN THE ACQUISITION OF NEW PROPERTIES WHI CH IS A FURTHER PROOF FROM THE RETURN OF INCOME FILED BY TH E ASSESSEE WHERE SUCH INVESTMENT WAS DECLARED AS ADDITIONAL UNDISCLOSED INCOME, THUS THE AO CANNOT PLAY BLOW HO T AND BLOW COLD ON THE SAME ISSUE AS SHE HERSELF HAS ACCE PTED THE RECEIPT OF ON-MONEY AND ON THE OTHER HAND DOUBTED T HE PAYMENT OF ON-MONEY AT THE TIME OF REINVESTMENT OF THE SAME. THE HONBLE GUJRAT HIGH COURT IN THE CASE OF GLASS LINES EQUIPMENTS CO. LTD V/S CIT REPORTED IN 253 IT R 454 HAS HELD AS UNDER: INTERPRETATION OF DOCUMENTS DOCUMENTS MUST BE RE AD AS A WHOLE- IT IS A WELL SETTLED CANON OF INTERPRETATION THAT A DOCUMENT HAS TO BE READ AS A WHOLE IT IS NOT PERMI SSIBLE TO ACCEPT A PART AND IGNORE THE REST OF THE DOCUMENT. SINCE THE ASSESSEE HAS MADE THE PAYMENTS TOWARDS TH E ACQUISITION OF NEW PROPERTY WITHIN THE TIME LIMIT P ERMISSIBLE U/S 139(4) OF THE ACT AND THE PAYMENTS HAVE DULY BE EN ACKNOWLEDGEMENT BY THE AO HERSELF IN THE ASSESSMENT ORDER ITSELF, WE FIND NO REASON TO HOLD THAT THERE WERE N O EVIDENCE FOUND FOR SUCH INVESTMENTS. THE DECISION OF HONBLE JURISDICTION HIGH COURT IN THE CASE OF JAI STEEL (S UPRA) IS ALSO ITA 1117/JP/2016_ MAHENDRA RAJNIKANT ZAVERI, JAIPUR VS. ITO, JAIPUR 14 NOT APPLICABLE THE PRESENT CASE AS THERE IS NO CLAI M MADE IN THE RETURN FILED U/S 153A WHICH WAS NOT CLAIMED IN THE ORIGINAL RETURN. IN THAT CASE, IN THE ORIGINAL ASSE SSMENT NO CLAIM WAS MADE TOWARDS THE DEDUCTION U/S 801 WHICH WAS MADE AFRESH IN THE RETURN FILED U/S 153A AND UNDER THESE FACTS THE HONBLE COURT HAS OBSERVED THAT NO FRESH CLAIM COULD BE MADE IN THE RETURN U/S 153A OF THE ACT. IN THE PRESENT CASE, THE ASSESSEE HAS NOT FILED THE RETURN U/S 139(1) OF THE ACT ON THE BONAFIDE BELIEF THAT SHE WAS ENTI TLED FOR DEDUCTION U/S 54F AND AFTER SUCH DEDUCTION HER RETU RN WAS BELOW THE MAXIMUM AMOUNT NOT CHARGEABLE TO TAX AND THEREFORE SHE DID NOT FILED THE RETURN OF INCOME AN D WHEN NOTICE U/S 153A WAS RECEIVED, SHE HAD MADE THE CLAI M OF DEDUCTION U/S 54F FOR THE FULL AMOUNT OF RS. 78 LAC S WHICH WAS THOUGH RESTRICTED UPTO THE AMOUNT OF CAPITAL GA IN DECLARED IN THE RETURN OF RS. 19,12,542/-. IN VIEW OF THESE FACTS, WE ARE OF THE CONSIDERED VIEW THAT THE ASSES SEE IS ENTITLED FOR DEDUCTION U/S 54F AT RS. 78 LACS AS CL AIMED BY HER AND THE LD. CIT(A) HAS RIGHTLY ALLOWED THE SAME , THEREFORE, THE ORDER OF THE LD. CIT(A) IS UPHELD ON THIS ISSUE. AS A RESULT THE GROUNDS TAKEN BY THE DEPARTMENT IN THIS RESPECT ARE DISMISSED. 5.6 IN THE RESULT ITA NO. 71/JP/15 OF THE REVENUE I S DISMISSED. 9. IT IS ALSO RELEVANT TO NOTE THAT THE SALE CONSID ERATION WAS RECEIVED MUCH AFTER DUE DATE OF FILING OF RETURN OF INCOME W HICH MAKES IMPOSSIBLE FOR ASSESSEE TO MAKE THE INVESTMENTS ON/BEFORE DUE DATE OF FILING OF RETURN. ON THE ISSUE OF IMPOSSIBILITY OF PERFORMANC E TO INVEST THE AMOUNT IN SPECIFIED ASSETS WITHIN 6 MONTHS FROM DATE OF TR ANSFER, THE CBDT APPRECIATED SUCH SITUATION AND HAS CLARIFIED THAT T HE PERIOD OF 6 MONTHS FOR MAKING INVESTMENTS IN SPECIFIED ASSETS HAS TO B E RECKONED FROM THE DATE OF THE SALE OF SUCH STOCK-IN-TRADE WHEN THE RI GHT TO COLLECT SALE CONSIDERATION IN SUCH CASES AROSE, WHICH WAS MUCH A FTER THE DATE OF TRANSFER AS CONTEMPLATED FOR THE PURPOSE OF TAXATIO N. THE HONBLE ITAT, ITA 1117/JP/2016_ MAHENDRA RAJNIKANT ZAVERI, JAIPUR VS. ITO, JAIPUR 15 PUNE BENCH (SUPRA) HAS TAKEN SUCH VIEW AND THE RELE VANT PARA IS AS UNDER: THE INTERPRETATION PLACED BY THE CBDT IN CONSULTAT ION WITH THE MINISTRY OF LAW TO THE CONDITION OF MAKING INVESTME NT WITHIN SIX MONTHS FROM THE DATE OF TRANSFER IN SECTION 54EC WOULD SUP PORT THE CLAIM OF THE ASSESSEE IN THIS CASE ALSO FOR EXEMPTION FROM CAPIT AL GAIN WITH RESPECT TO THE IMPUGNED SUM OF RS. 50 LAKHS INVESTED IN SPECIF IED ASSETS ON 03-08- 2007 AND 27-10-2007. IN THE PRESENT CASE, ADMITTEDL Y THE IMPUGNED AMOUNT OF SALE PROCEEDS HAVE BEEN RECEIVED BY THE A SSESSEE MUCH AFTER THE DATE OF TRANSFER I.E., 12-7-2005, SO HOWEVER, I T IS ALSO EMERGING FROM THE RECORD THAT THE INVESTMENTS OF RS. 12,50,000 AN D RS. 37,50,000 MADE ON 3-8-2007 AND 27-10-2007 RESPECTIVELY HAVE BEEN M ADE WITHIN SIX MONTHS OF RECEIPT OF SUCH CONSIDERATION. THEREFORE, HAVING REGARD TO THE INTERPRETATION PLACED BY THE CBDT TO UNDERSTAND THE REQUIREMENT OF MAKING INVESTMENT WITHIN SIX MONTHS FROM THE DATE O F TRANSFER IN SECTION 54EC THE TRIBUNAL IS INCLINED TO UPHOLD THE PLEA OF THE ASSESSEE FOR EXEMPTION FROM TAX ON CAPITAL GAINS QUA IMPUGNED AM OUNT OF RS. 50 LAKHS. THEREFORE, ON THIS ASPECT, ASSESSEE HAS TO S UCCEED. 10. THEREFORE, CONSIDERING ALL THE RELEVANT FACTS O F THE CASE AND ALSO CASES RELIED UPON, WE ALLOW THE APPEAL OF THE ASSES SEE. IN THE NET RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 08/09/2017. ITA 1117/JP/2016_ MAHENDRA RAJNIKANT ZAVERI, JAIPUR VS. ITO, JAIPUR 16 SD/- SD/- DQY HKKJR HKKXPAN (KUL BHARAT) (BHAGCHAND) U;KF;D LNL;@ U;KF;D LNL;@ U;KF;D LNL;@ U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ YS[KK LNL;@ YS[KK LNL;@ YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ TK;IQJ TK;IQJ TK;IQJ@ @@ @ JAIPUR FNUKAD@ DATED:- 08/09/2017 *GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- MAHENDRA RAJNIKANT ZAVERI, JAIPUR 2. IZR;FKHZ @ THE RESPONDENT- ITO, JAIPUR 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 1117/JP/2016) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR