Rajesh Puneyani , Bangalore V. Income TAx Officer Ward-5(3)(3), Bangalore

ITA 1267/BANG/2018

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 9763 (ITAT-BANGALORE)
• Duration Of Justice: 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 18-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R CHANDRASHEKAR
• Keywords: Capital asset; Source of fund; Cost of acquisition
• Section: 54F; 54; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI JASON P. BOAZ , ACCOUNTANT MEMBER I TA NO. 1267/BANG/2018 ASSESSMENT YEAR : 2013 - 14 SHRI RAJESH PUNEYANI, NO.38A, DREAM MEADOWS, NEAR RYAN INTERNATIONAL SCHOOL, KUNDALAHALLI, BENGALURU 560 037. PAN: ALZPP 1327R VS. THE INCOME TAX OFFICER, WARD 5(3)(3), BENGALURU. APP EL L ANT RESPONDENT APP ELL ANT BY : SHRI R. CHANDRASHEKAR , ADVOCATE RE SPONDENT BY : SMT. NANDINI DAS, ADDL. CIT(D R)(ITAT), BENGALURU. DATE OF HEARING : 07.09.2018 DATE OF PRONOUNCEMENT : 24 .09.2018 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE OR DER DATED 27.03.2018 OF THE CIT(APPEALS)-5, BENGALURU RELATIN G TO ASSESSMENT YEAR 2013-14. 2. THE ISSUE THAT ARISES FOR CONSIDERATION IN THIS APPEAL IS AS TO WHETHER THE REVENUE AUTHORITIES WERE JUSTIFIED IN DENYING T HE CLAIM OF ASSESSEE FOR DEDUCTION U/S. 54 OF THE INCOME-TAX ACT, 1961 [THE ACT], WHILE COMPUTING THE CAPITAL GAIN ON SALE OF CAPITAL ASSET, BEING A RESIDENTIAL HOUSE. ITA NO. 1267/BANG/2018 PAGE 2 OF 10 3. THE UNDISPUTED FACTS AND CIRCUMSTANCES OF THE CA SE ARE THAT THE ASSESSEE IS AN INDIVIDUAL. DURING THE PREVIOUS YEA R RELEVANT TO AY 2013-14 I.E., ON 28.03.2013, THE ASSESSEE SOLD PROPERTY BEI NG A RESIDENTIAL APARTMENT BEARING NO.E-202, II FLOOR, MEASURING 149 0 SQ.FT. TOGETHER WITH UNDIVIDED SHARE OF 596 SQ.FT. LAND IN SY. NO.186/2, HOODI VILLAGE, K.R. PURAM HOBLI, BANGALORE EAST TALUK [HEREINAFTER REFE RRED TO AS THE PROPERTY] FOR A SALE CONSIDERATION OF RS.55 LAKHS. IN THE RET URN OF INCOME FILED FOR THE AY 2013-14, THE ASSESSEE DECLARED LONG TERM CAPITAL GAIN ON SALE OF PROPERTY @ RS.15,68,717. THE COMPUTATION OF LONG T ERM CAPITAL GAIN AND SOURCE OF FUNDS OUT OF WHICH THE PROPERTY WAS ACQUI RED BY THE WAS GIVEN TO THE AO AS FOLLOWS:- BANGALORE PROPERTY (GOLDEN GATE PROPERTIES LTD.) DATE OF PURCHASE 29.03.2006 PURCHASE CONSIDERATION 19,68,780 (INCL. STAMP DUTY & REGN FEE) DATE OF IMPROVEMENT APRIL 2006 WORKING OF INDEXED COST PURCHASE COST INDEX (FY 2005 - 06) 19,68,070 X 852 497 33,75,050 COST OF IMPROVEMENT (FY 2006 - 07) 3,38,800 X 852 519 5,56,180 TOTAL 39,31,230 LESS: DATE OF SALE 28.03.2013 SALE CONSIDERATION 55,00,000 DIFFERENCE AMOUNT (LTCG) 15,68,770 ITA NO. 1267/BANG/2018 PAGE 3 OF 10 4. THE ASSESSEE CLAIMED DEDUCTION U/S.54 OF THE ACT OF THE ENTIRE CAPITAL GAIN ON THE GROUND THAT HE HAD PURCHASED A PROPERTY (SITE) SITUATED AT NO.38A, KUNDALAHALLI VILLAGE, K R PURAM HOBLI, B ANGALORE EAST, MEASURING ABOUT 2,480 S.FT. ON 27.09.2012 TO THE TU NE OF RS.84,60,236/- (INCLUDING STAMP DUTY & REGN EXPS). THE SOURCES FO R PURCHASE OF THE SITE WAS EXPLAINED BY THE ASSESSEE AS UNDER:- (A) LOAN FROM BANK 60,00,000 (B) ADVANCES RECEIVED FROM SALE OF FARIDABAD PROPERTY AND ALSO FROM OWN SOURCES 25,00, 000 ------------ 85,00,000 ------------ THE ASSESSEE CLAIMED THAT HE PUT UP CONSTRUCTION OV ER THE SITE OWNED BY HIM BY INCURRING COST OF CONSTRUCTION OF RS.88,20,0 00/- AND THAT THE CONSTRUCTION OF THE NEW ASSET WAS COMPLETED IN THE MONTH OF MAY 2014. IN SUPPORT OF THE STAND THAT CONSTRUCTION OF THE NEW A SSET WAS COMPLETED IN THE MONTH OF MAY 2014, THE ASSESSEE FILED EVIDENCE OF TAXES PAID IN THE BBMP AND BESCOM BANGALORE. IT WAS THE PLEA OF THE A SSESSEE THAT SINCE THE LONG TERM CAPITAL GAIN OF RS.15,68,770/- WAS UT ILISED FOR THE PURPOSE OF CONSTRUCTION OF THE ABOVE PROPERTY WITHIN THREE YEARS, HE SHOULD BE ALLOWED DEDUCTION U/S. 54 OF THE ACT. SEC.54 OF TH E ACT READS THUS: PROFIT ON SALE OF PROPERTY USED FOR RESIDENCE. 54. (1) SUBJECT TO THE PROVISIONS OF SUB-SECTION (2), W HERE, IN THE CASE OF AN ASSESSEE BEING AN INDIVIDUAL OR A HINDU UNDIVIDED F AMILY, THE CAPITAL GAIN ARISES FROM THE TRANSFER OF A LONG-TERM CAPITAL ASS ET, BEING BUILDINGS OR LANDS APPURTENANT THERETO, AND BEING A RESIDENTIAL HOUSE, THE INCOME OF WHICH IS CHARGEABLE UNDER THE HEAD 'INCOME FROM HOUSE PROPER TY' (HEREAFTER IN THIS SECTION REFERRED TO AS THE ORIGINAL ASSET), AND THE ASSESSEE HAS WITHIN A PERIOD OF ONE YEAR BEFORE OR TWO YEARS AFTER THE DA TE ON WHICH THE TRANSFER TOOK PLACE PURCHASED, OR HAS WITHIN A PERI OD OF THREE YEARS AFTER ITA NO. 1267/BANG/2018 PAGE 4 OF 10 THAT DATE CONSTRUCTED, A RESIDENTIAL HOUSE, THEN, I NSTEAD OF THE CAPITAL GAIN BEING CHARGED TO INCOME-TAX AS INCOME OF THE P REVIOUS YEAR IN WHICH THE TRANSFER TOOK PLACE, IT SHALL BE DEALT WITH IN ACCORDANCE WITH THE FOLLOWING PROVISIONS OF THIS SECTION, THAT IS TO SA Y, ( I ) IF THE AMOUNT OF THE CAPITAL GAIN IS GREATER THAN THE COST OF THE RESIDENTIAL HOUSE] SO PURCHASED OR CONSTRUCTED (HEREAFTER IN TH IS SECTION REFERRED TO AS THE NEW ASSET), THE DIFFERENCE BETWEEN THE AMOUNT OF TH E CAPITAL GAIN AND THE COST OF THE NEW ASSET SHALL BE CHARGED UNDER SECTION 45 AS THE INCOME OF THE PREVIOUS YEAR; AND FOR THE PURPOSE OF COMPUTING IN RESPECT OF THE NEW ASSET ANY CAPITAL GAIN ARISING FROM ITS TRANSFER WITHIN A PERIOD OF THREE YEARS OF ITS PURCHASE OR CONSTRUCTION, AS THE CASE MAY BE, THE C OST SHALL BE NIL ; OR ( II ) IF THE AMOUNT OF THE CAPITAL GAIN IS EQUAL TO OR LESS THAN THE COST OF THE NEW ASSET, THE CAPITAL GAIN SHALL NOT BE CHARGED UNDER SECTION 45 ; AND FOR THE PURPOSE OF COMPUTING IN RESPECT OF THE NEW ASSET AN Y CAPITAL GAIN ARISING FROM ITS TRANSFER WITHIN A PERIOD OF THREE YEARS OF ITS PURCHASE OR CONSTRUCTION, AS THE CASE MAY BE, THE COST SHALL BE REDUCED BY TH E AMOUNT OF THE CAPITAL GAIN. (2) THE AMOUNT OF THE CAPITAL GAIN WHICH IS NOT APP ROPRIATED BY THE ASSESSEE TOWARDS THE PURCHASE OF THE NEW ASSET MADE WITHIN O NE 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 ASS ET BEFORE THE DATE OF FURNISHING THE RETURN OF INCOME UNDER SECTION 139, SHALL BE DEPOSITED BY HIM BEFORE FURNISHING SUCH RETURN SUCH DEPOSIT BEING MA DE IN ANY CASE NOT LATER THAN THE DUE DATE APPLICABLE IN THE CASE OF THE ASS ESSEE 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 RET URN 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 PURCH ASE OR CONSTRUCTION OF THE NEW ASSET TOGETHER WITH THE AMOUNT SO DEPOSITED SHALL B E DEEMED TO BE THE COST OF THE NEW ASSET : PROVIDED THAT IF THE AMOUNT DEPOSITED UNDER THIS SUB-SECTIO N IS NOT UTILISED WHOLLY OR PARTLY FOR THE PURCHASE OR CONSTRUCTION O F THE NEW ASSET WITHIN THE PERIOD SPECIFIED IN SUB-SECTION (1), THEN, ( I ) THE AMOUNT NOT SO UTILISED SHALL BE CHARGED UNDER SECTION 45 AS THE INCOME OF THE PREVIOUS YEAR IN WHICH THE PERIOD OF THREE YEAR S FROM THE DATE OF THE TRANSFER OF THE ORIGINAL ASSET EXPIRES; AND ( II ) THE ASSESSEE SHALL BE ENTITLED TO WITHDRAW SUCH A MOUNT IN ACCORDANCE WITH THE SCHEME AFORESAID. (EMPHASIS SUPPLIED) ITA NO. 1267/BANG/2018 PAGE 5 OF 10 5. THE AO DID NOT DISPUTE THE FACTUAL DETAILS WITH REGARD TO THE CLAIM OF DEDUCTION U/S.54 OF THE ACT VIZ., THE FACT THAT THE ASSESSEE HAS WITHIN A PERIOD OF 3 YEARS AFTER THE DATE ON WHICH THE TRANS FER TOOK PLACE CONSTRUCTED, A RESIDENTIAL HOUSE. THE AO HOWEVER W AS OF THE VIEW THAT THE CLAIM FOR DEDUCTION U/S.54 OF THE ACT CANNOT BE ALL OWED BECAUSE THERE WAS VIOLATION OF THE CONDITION LAID DOWN IN SEC.54(2) O F THE ACT, WHICH LAYS DOWN THAT THE UNUTILIZED CAPITAL GAIN HAD TO BE DEPOSIT ED BY THE ASSESSEE IN A SPECIFIED BANK ACCOUNT ON OR BEFORE THE DUE DATE FO R FILING RETURN OF INCOME U/S.139(1) OF THE ACT BUT THE ASSESSEE DID NOT DO S O. THE DUE DATE FOR FILING THE RETURN OF INCOME U/S. 139 OF THE ACT, WA S 31.07.2017 FOR THE RELEVANT ASSESSMENT YEAR. SINCE NO SUCH DEPOSIT WA S MADE BY THE ASSESSEE, THE AO WAS OF THE VIEW THAT THE DEDUCTION CLAIMED BY THE ASSESSEE CANNOT BE ALLOWED. 6. THE AO ALSO NOTICED THAT THERE WAS A SHORT TERM CAPITAL GAIN ON SALE OF PROPERTY BY ASSESSEE AT FARIDABAD ON 27.3.2012 W HICH FALLS WITHIN THE PREVIOUS YEAR RELEVANT TO AY 2012-13. THE SALE OF FARIDABAD PROPERTY WAS MENTIONED BY THE ASSESSEE IN HIS LETTER DATED 10.3. 2016 FILED BEFORE THE AO. ON SALE OF FARIDABAD PROPERTY, THE ASSESSEE DE RIVED A SHORT TERM CAPITAL GAIN OF RS.75,000 WHICH WAS COMPUTED BY THE ASSESSEE AS FOLLOWS:- FARIDABAD PROPERTY (BPTP LTD.) DATE OF PURCHASE 27.03.2012 COST OF PURCHASE 30,87,500 DATE OF SALE 01.10.2012 SALE CONSIDERATION 31,62,500 DIFFERENCE AMOUNT (S T C G) 75,000 ITA NO. 1267/BANG/2018 PAGE 6 OF 10 7. THE AO NOT ONLY DENIED THE CLAIM OF ASSESSEE FO R DEDUCTION U/S. 54 OF THE ACT, BUT ALSO BROUGHT TO TAX SHORT TERM CAPI TAL GAIN ON SALE OF FARIDABAD PROPERTY, THOUGH THE YEAR OF TAXABILITY O F SHORT TERM CAPITAL GAIN ON SALE OF FARIDABAD PROPERTY CAN ONLY BE IN AY 201 2-13. THE FOLLOWING WAS THE COMPUTATION OF TOTAL INCOME MADE BY THE AO: - 5. IN THE CIRCUMSTANCES CITED SUPRA, THE ASSESSMEN T IS COMPLETED BY MAKING AN ADDITION OF CAPITAL GAIN AMO UNT OF RS.75,000/- UNDER THE HEAD STCG AND RS.15,68,770/- UNDER THE HEAD LTCG AND CHARGED AT 20% AS UNDER:- INCOME RETURNED : RS.34,23,750 ADD: STCG AS PER PARA 3 ABOVE : RS. 75,000 ADD: LTCG AS PER PARA 3&4 ABOVE: RS.15,68,770 ---------------- TOTAL INCOME AS RECOMPUTED RS.50,67,520 ---------------- 8. BEFORE THE CIT(APPEALS), THE ASSESSEE CONTENDED THAT IF THE CAPITAL GAIN IS UTILISED IN CONSTRUCTION OF RESIDENTIAL HOU SE PROPERTY WITHIN THE TIME PERIOD MENTIONED IN SECTION 139(4) OF THE ACT, THEN THE ASSESSEE SHOULD BE ENTITLED TO DEDUCTION U/S. 54 OF THE ACT, NOTWITHST ANDING THE FACT THAT UNUTILISED CAPITAL GAIN WAS DEPOSITED IN THE DESIGN ATED BANK ACCOUNT AS CONTEMPLATED BY SECTION 54(2) OF THE ACT. THE ASSE SSEE IN SUPPORT OF HIS CLAIM AS AFORESAID PLACED RELIANCE ON THE DECISION OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF FATHIMA BAI V. ITO [2009] 32 DTR 243 (KAR) . THE ASSESSEE ALSO CONTENDED THAT SHORT TERM CAPITAL GAI N ON SALE OF FARIDABAD PROPERTY CANNOT BE ASSESSED TO TAX IN AY 2013-14 BE CAUSE THE SALE OF FARIDABAD PROPERTY TOOK PLACE ON 27.3.2012, WHICH W AS PREVIOUS YEAR RELEVANT TO AY 2012-13. THE CONTENTION OF THE ASSE SSEE WAS, HOWEVER, NOT ACCEPTED BY THE CITA. HE WAS OF THE VIEW THAT IF U NUTILISED SALE PROCEEDS ARE NOT DEPOSITED IN THE DESIGNATED BANK ACCOUNT ON OR BEFORE THE DUE DATE FOR FILING OF RETURN U/S. 139(1) OF THE ACT, THE AS SESSEE CANNOT CLAIM THE ITA NO. 1267/BANG/2018 PAGE 7 OF 10 BENEFIT OF DEDUCTION U/S. 54(1) OF THE ACT. THE AS SESSEE HAD PLACED RELIANCE ON THE DECISION OF HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT V. B.S. SHANTAKUMARI 60 TAXMAN.COM 47 FOR THE PROPOSITION THAT IF THE CONSTRUCTION OF THE NEW ASSET IS COMPLETED WITHIN T HE PERIOD OF THREE YEARS AFTER THE DATE OF TRANSFER, THEN THERE IS NO NECESS ITY TO MAKE A DEPOSIT OF UNUTILISED CAPITAL GAIN IN THE DESIGNATED BANK ACCO UNT AS CONTEMPLATED IN SECTION 54(2) OF THE ACT. THIS CONTENTION WAS NOT ACCEPTED BY THE CIT(A) FOR THE FOLLOWING REASONS:- FURTHER THE APPELLANT RELIED ON THE JURISDICTIONAL HIGH COURTS DECISION IN THE CASE OF CIT VS. B. S. SHANTHA KUMAR I REPORTED IN 60 TAXMANN.COM 47 WHEREIN IT WAS HELD THAT ASSESSIN G OFFICER DISALLOWED CLAIM ON GROUND THAT ASSESSEE HAD NOT CO MPLETED CONSTRUCTION OF HOUSE WITHIN THREE YEAR AS PER SEC. 54F. WHETHER ONCE IT WAS ESTABLISHED BY ASSESSEE THAT SHE HAD IN VESTED ENTIRE NET CONSIDERATION IN CONSTRUCTION OF RESIDENTIAL HO USE WITHIN STIPULATED PERIOD, IT WOULD MEET REQUIREMENT OF SEC ,54F AND SHE WOULD BE ENTITLED TO GET BENEFIT OF SEC.54F. HOWEVE R, ON PLAIN READING OF THE PROVISION OF SEC.54 AND 54F IT IS MA NDATORY TO DEPOSIT THE UNUTILIZED THE CAPITAL GAIN IN THE CAPI TAL GAIN DEPOSIT SCHEME BEFORE THE DUE DATE FOR FURNISHING THE RETUR N OF INCOME U/S.139(1) OF THE ACT. THE APPELLANT COULD NOT FURN ISH ANY PROOF FOR STARTED UTILIZING THE CAPITAL GAINS IN THE CONS TRUCTION OF THE HOUSE, THE OBSERVATION MADE BY THE ASSESSING OFFICE R IS HEREBY UPHELD. 9. AGGRIEVED BY THE ORDER OF CITA THE ASSESSEE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. WE HAVE HEARD THE RIVAL SUBMISSIONS. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUB MISSIONS AS WERE MADE BEFORE THE LOWER AUTHORITIES. THE LD. DR RELIED ON THE ORDER OF CIT(APPEALS). ITA NO. 1267/BANG/2018 PAGE 8 OF 10 10. WE HAVE GIVEN A CAREFUL CONSIDERATION TO THE R IVAL SUBMISSIONS. IT IS CLEAR FROM THE ORDER OF AO THAT THERE IS NO DISPUTE THAT THE TRANSFER OF FARIDABAD PROPERTY TOOK PLACE ON 27.3.2012. THIS I S CLEAR FROM THE LETTER OF ASSESSEE FILED BEFORE THE AO DATED 10.3.2016, COPY OF WHICH WAS FILED BEFORE US AND PLACED ON RECORD. THEREFORE, THE SHO RT TERM CAPITAL GAIN ON SALE OF THIS PROPERTY CAN BE CONSIDERED ONLY IN AY 2012-13 AND NOT IN AY 2013-14. UNDER SECTION 45 OF THE ACT, CAPITAL GAIN THAT ACCRUES OR ARISES ON TRANSFER OF A CAPITAL ASSET HAS TO BE BROUGHT TO TA X ONLY IN THE PREVIOUS YEAR IN WHICH THE TRANSFER TOOK PLACE. THEREFORE, THE A CTION OF THE REVENUE AUTHORITIES IN TAXING THE SHORT TERM CAPITAL GAIN O N SALE OF FARIDABAD PROPERTY IN AY 2013-14 IS HELD TO BE NOT PROPER. THE AO IS, HOWEVER, AT LIBERTY TO TAKE APPROPRIATE ACTION IN THIS REGAR D AS PER THE PROVISIONS OF LAW. 11. AS FAR AS DEDUCTION U/S. 54 OF THE ACT ON SALE OF THE PROPERTY AT BANGALORE VIZ., LONG TERM CAPITAL GAIN OF RS.15,68, 770 IS CONCERNED, IT IS AN ADMITTED POSITION THAT THE DUE DATE FOR FILING THE RETURN OF INCOME U/S. 139(1) OF THE ACT WAS 31.7.2013 FOR AY 2013-14. IT IS ALS O NOT IN DISPUTE THAT THE ASSESSEE DID NOT DEPOSIT THE UNUTILISED LONG TERM C APITAL GAIN IN THE DESIGNATED BANK ACCOUNT AS CONTEMPLATED U/S. 54(2) OF THE ACT. NEVERTHELESS, THE ASSESSEE HAS COMPLETED CONSTRUCTI ON OF THE NEW ASSET IN MAY, 2014. THE DUE DATE FOR FILING THE RETURN OF I NCOME U/S. 139(4) OF THE ACT FOR AY 2013-14 WAS 31.3.2015. THE ASSESSEE HAS , HOWEVER, COMPLETED THE CONSTRUCTION OF THE NEW ASSET IN MAY, 2014 WHICH WAS BEFORE THE DUE DATE FOR FILING RETURN OF INCOME U/S . 139(4) OF THE ACT. IT IS ALSO NOTICED THAT THE CONSTRUCTION OF THE NEW ASSET HAS BEEN COMPLETED WITHIN A PERIOD OF THREE YEARS AFTER THE DATE OF TR ANSFER OF THE CAPITAL ASSET WHICH HAS GIVEN RISE TO THE CAPITAL GAIN. IN THESE CIRCUMSTANCES, THE ASSESSEE IS ENTITLED TO THE BENEFIT OF DEDUCTION U/ S. 54 OF THE ACT. ON IDENTICAL FACTS, THE HON'BLE KARNATAKA HIGH COURT I N THE CASE OF FATHIMA BAI ITA NO. 1267/BANG/2018 PAGE 9 OF 10 (SUPRA) DECIDED IDENTICAL ISSUE. THE TIME PERIOD AVAILABL E FOR THE ASSESSEE FOR MAKING SUCH DEPOSIT WAS ALSO AN ISSUE BEFORE TH E HONBLE JURISDICTIONAL HIGH COURT, WHEREIN IT WAS HELD AS FOLLOWS:- 9. THE S. 139(4) DECLARES THAT THE ASSESSEE SHOUL D FILE RETURNS WITHIN THE TIME PRESCRIBED, IF HE FAILS TO FILE RET URNS, HE MAY FILE RETURNS FOR ANY PREVIOUS YEAR AT ANY TIME BEFORE EX PIRY OF ONE YEAR FROM THE END OF RELEVANT ASSESSMENT YEAR. 10. IN THE INSTANT CASE, THE DUE DATE FOR FILING O F RETURN IS 30TH JULY, 1988. UNDER S. 139(4) THE ASSESSEE WAS ENTITL ED TO FILE RETURN IN THE EXTENDED TIME, WHICH IS WITHIN 31ST MARCH, 1 990. 11. THE EXTENDED DUE DATE UNDER S. 139(4) WOULD BE 31 ST MARCH, 1990. THE ASSESSEE DID NOT FILE THE RETURN W ITHIN THE EXTENDED DUE DATE, BUT FILED THE RETURN ON 27TH FEB ., 2000. HOWEVER, THE ASSESSEE HAD UTILISED THE ENTIRE CAPIT AL GAINS BY PURCHASE OF A HOUSE PROPERTY WITHIN THE STIPULATED PERIOD OF S.54(2) I.E., BEFORE THE EXTENDED DUE DATE FOR RETU RN UNDER S. 139. THE ASSESSEE TECHNICALLY MAY HAVE DEFAULTED IN NOT FILING THE RETURN UNDER S. 139(4). BUT, HOWEVER, UTILISED THE CAPITAL GAINS FOR PURCHASE OF PROPERTY BEFORE THE EXTENDED DUE DATE U NDER S. 139(4). THE CONTENTION OF THE REVENUE THAT THE DEPO SIT IN THE SCHEME SHOULD HAVE BEEN MADE BEFORE THE INITIAL DUE DATE AND NOT THE EXTENDED DUE DATE IS AN UNTENABLE CONTENTION. 12. THE GAUHATI HIGH COURT IN CIT VS. RAJESH KUMAR JALAN (2006) 206 CTR (GAU) 361: (2006) 286 ITR 274(GAU) H AS TAKEN A SIMILAR VIEW THAT THE TIME-LIMIT FOR DEPOSIT UNDE R THE SCHEME OR UTILISATION CAN BE MADE BEFORE THE DUE DATE FOR FIL ING OF RETURNS UNDER S. 139(4). 12. IN THE PRESENT CASE, IT IS NOT DISPUTED THAT T HE ASSESSEE HAS COMPLETED THE CONSTRUCTION OF THE NEW ASSET IN THE MONTH OF MAY, 2014 WHICH DATE IS BEFORE THE TIME LIMIT FOR FILING RETU RN U/S.139(4) OF THE ACT. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT ASSESS EE IS ENTITLED TO DEDUCTION U/S. 54 OF THE ACT. THE DECISION IN THE CASE OF CIT V. K. RAMACHANDRA RAO IN ITA NO.47/2014 DATED 14.7.2014 OF THE HON'BLE ITA NO. 1267/BANG/2018 PAGE 10 OF 10 KARNATAKA HIGH COURT ALSO SUPPORTS THE PLEA OF THE ASSESSEE. THE HON'BLE HIGH COURT TOOK THE VIEW THAT THE QUESTION OF DEPOS IT OF UNUTILISED CAPITAL GAIN WILL COME UP FOR CONSIDERATION ONLY WHEN THE C APITAL GAIN IS NOT UTILISED IN CONSTRUCTION OF HOUSE PROPERTY AND WHEN IT IS SO UTILISED FOR CONSTRUCTION OF HOUSE PROPERTY, THEN THERE IS NO NEED TO MAKE A DEPOSIT IN THE SPECIFIED BANK ACCOUNT. THE DECISIONS RENDERED IN THE CONTEX T OF SECTION 54F OF THE ACT WILL ALSO APPLY TO SECTION 54 OF THE ACT, BECAU SE BOTH THE SECTIONS ARE IN PARI MATERIA THE SAME, ON THE ASPECT OF DEPOSIT OF UNUTILIZED CAPITAL GAIN IN SPECIFIED BANK ACCOUNT. 13. FOR THE REASONS GIVEN ABOVE, WE HOLD THAT THE ASSESSEE SHOULD BE ALLOWED DEDUCTION U/S. 54 OF THE ACT AS CLAIMED BY HIM. 14. IN THE RESULT, THE APPEAL BY THE ASSESSEE IS A LLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 24 TH DAY OF SEPTEMBER, 2018. SD/- SD/- ( JASON P. BOAZ ) ( N.V. VASUDEVAN ) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE, DATED, THE 24 TH SEPTEMBER, 2018. / D ESAI S MURTHY / COPY TO: 1. APP ELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE.