Raam Gajanan Khanzode, Pune V. Income-tax Officer,

ITA 1330/PUN/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1513 (ITAT-PUNE)
• Duration Of Justice: 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 16-06-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: HITENDRA NINAWE
• Keywords: Sale consideration of property below Jantri Value
• Section: 54F; 54; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, PUNE . . , BEFORE SHRI R.K. PANDA, AM . / ITA NO.1330/PN/2016 / ASSESSMENT YEAR : 2010-11 RAAM GAJANAN KHANZODE, A-16/602, SUNWAY MEGAPOLIS, RAJIV GANDHI INFOTECH PARK, PHASE 3, HINJEWADI, PUNE 411 057 PAN NO.ABEPR6657B . / APPELLANT V/S ITO, WARD - 7 (2), PUNE . / RESPONDENT / APPELLANT BY : SHRI NIKHIL PATHAK / RESPONDENT BY : SHRI HITENDRA NINAWE / ORDER PER R.K.PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 09-03-2016 OF THE CIT(A)-V, PUNE RELATING TO THE ASSESSMENT YEAR 2010-11. 2. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET DID NOT PRESS GROUND OF APPEAL NO.4 FOR WHICH THE LD. DEPARTMENTA L REPRESENTATIVE HAS NO OBJECTION. ACCORDINGLY, THE SAME IS DISMISSED AS NOT PRESSED. GROUND OF APPEAL NO.5 BEING G ENERAL IN NATURE IS DISMISSED. 3. GROUNDS OF APPEAL NO.1 TO 3 BY THE ASSESSEE READ AS UNDER: THE FOLLOWING GROUNDS ARE TAKEN WITHOUT PREJUDICE T O EACH OTHER / DATE OF HEARING :28.07.2016 / DATE OF PRONOUNCEMENT:29.07.2016 2 ITA NO.1330/PN/2016 ON FACTS AND IN LAW : 1. THE LEARNED CIT(A) ERRED IN NOT ALLOWING THE DED UCTION U/S. 54 ON THE LONG TERM CAPITAL GAINS ON THE REASON THA T THE APPELLANT HAD NOT DEPOSITED THE CAPITAL GAINS IN A SPECIFIED BAN K ACCOUNT U/S. 54 PRIOR TO THE DUE DATE OF FILING OF THE RETURN. 2. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE APPELLANT HAD DEPOSITED THE AMOUNT OF THE LONG TERM CAPITAL GAIN W ITH THE NATIONALISED BANK BUT HOWEVER, INADVERTENTLY, THE SAM E WERE NOT DEPOSITED IN CAPITAL GAINS ACCOUNT SCHEME WITH THE BAN K AND FOR THIS SMALL DISCREPANCY, THE DEDUCTION U/S 54 SHOULD NOT HAVE BEEN DENIED. 3. WITHOUT PREJUDICE, THE LEARNED CIT(A) ERRED IN N OT ALLOWING THE DEDUCTION U/S 54 ON THE AMOUNT INVESTED BY THE AP PELLANT FOR THE NEW HOUSE BEFORE THE DUE DATE U/S 139(4) IN VIEW OF VARIOUS DECISIONS OF THE COURTS AND ITAT . 4. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A N INDIVIDUAL AND FILED HIS RETURN OF INCOME ON 30-07-2010 DECLA RING TOTAL INCOME OF RS.4,05,677/-. DURING THE COURSE OF ASSESSM ENT PROCEEDINGS THE AO OBSERVED THAT ASSESSEE HAS SOLD A PROPERTY AT RS.70 LAKHS AND THE MARKET VALUE OF THE SAME U/S.50C OF THE ACT WAS RS.82,83,000/-. THE ASSESSEE HAD CALCULATED THE INCOM E FROM CAPITAL GAIN TAKING THE SALE PRICE OF THE PROPERTY AT RS.35 LAKHS BEING 50% ON RS.70 LAKHS WHICH IS HIS SHARE AND CLAIME D EXEMPTION U/S.54. DURING THE COURSE OF ASSESSMENT PROC EEDINGS THE ASSESSEE SUBMITTED WORKING OF CAPITAL GAIN IN WHICH HE HAS SHOWN CAPITAL GAIN OF RS.39,80,773/- AND AFTER CLAIMING EXEMPTION U/S.54 HE HAD SHOWN CAPITAL GAIN AS NIL. FROM TH E VARIOUS DETAILS FURNISHED BY THE ASSESSEE THE AO NOTED T HAT ASSESSEE HAS INVESTED RS.6,80,000/- OUT OF CAPITAL GAIN OF RS.39,80,773/- IN THE NEW PROPERTY BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME U/S.139(1) AND THE BALANCE AMOUNT OF RS.33,00,773/- WAS DEPOSITED IN FIXED DEPOSIT AND NOT IN C APITAL GAIN ACCOUNT U/S.54(2). HE, THEREFORE, WAS OF THE OPINION TH AT THE AMOUNT WHICH IS NOT UTILIZED AND DEPOSITED IN CAPITAL G AIN 3 ITA NO.1330/PN/2016 ACCOUNT BEFORE FILING THE RETURN OF INCOME IS NOT ENTITLED T O DEDUCTION U/S.54. HE THEREFORE REWORKED THE CAPITAL GAIN AT RS.33,00,733/- AS LONG TERM CAPITAL GAIN. 5. IN APPEAL THE LD.CIT(A) UPHELD THE ACTION OF THE AO BY OBSERVING AS UNDER : 3.4 I HAVE PERUSED THE MATERIAL ON RECORDS AND THE SUBMISSION MADE BY THE APPELLANT CAREFULLY, I FIND THAT THE ASSE SSEE HAD SOLD THE PROPERTY ON 9.12.2009 AT RS . 37,00,000/ - , THE COST OF WHICH AS PER THE PROVISIONS OF SEC T ION 5 0C WAS RS . 82,83,000/ - . THE ASSESSEE, BEING THE OWNER OF THE HALF OF THE SAID PROPERTY , THE SALE CONSIDERATION IN HIS HAND WAS RS. 41 , 41,500/- . THE AO , DETERMINED THE INCOME FROM LONG TERM CAPITAL GAIN AT RS 33,00,7 33/-, AFTER DEDUCTING THE COST OF THE PROPERTY ALONGWITH INDEXAT ION AT RS. 1,60 , 727/ - AND G IVING B ENEFIT OF EXEMPTION U/S 54(1) PARTLY OF RS . 6,80,000/- FOR INVESTMENT IN PURCH A SE O F N EW PROPERTY. AS THE ASSESSEE HAD KEPT THE AMOUNT IN FD AND NOT IN A DEPOSIT SCHEME UNDER THE CAPITAL GAINS SCHEME AS PROVIDED U/S 54(2) OF TH E AC T, THE AO D I SALLOWED THE SAME . THE APPELLANT , DURING THE APPELLATE PROCEED I NG S CO N TE N DED THAT, HE HAD ACQUIRED A PROPERTY AT A - 16 C02 , SUNWAY BUILDING O F MEGAPOLIS HOUSING PROJECT , RAJIV GANDHI INFOTECH PARK, MONJEMAN , TALUKA MULSHI , D I ST-PU N E ON 19.01 . 2011 BEING REGISTERED WITH THE SUB-REGISTRAR, MULSHI, PAUD A T S.NO 363/2011. THE APPELLANT CLAIMED THAT, THE COST OF T HE SAID PROPERTY WAS RS . 40,55,957/-, WHICH WAS PAID ON 15.10.2012. THUS, THE APPELLANT WAS ENTITLED TO DEDUCTION U/S 54, BEING TH E INVESTMENT MADE OUT OF SALE OF THE PROPERTY IN QUESTION, FOR WHI CH INCOME FROM CAPITAL GAIN HAD BEEN DETERMINED BY THE AO. THE FAC TS ARE VERY CLEAR WITH REFERENCE TO THE PROVISIONS OF SECTION 54(2), (I ) THAT THE ASSESSEE WAS REQUIRED TO ACQUIRE A NEW ASSET WITHIN 1 YEAR FROM THE DATE OF WHEN THE TRANSFER OF THE ORIGINAL ASSET TOOK PLACE, WHICH WAS NOT UTILIZED BY HIM (II) OR THE PURCHASE OR CONSTRUCT A NEW ASSET BEFORE THE DATE OF FURNISHING OF RETURN U/S 139, SHALL BE DEPOSITED BY HIM BEFORE FURNISHING SUCH RETURN. (III) SUCH DEPO SIT BEING MADE IN ANY CASE NOT LATER THAN THE DUE DATE APPLICABLE I N THE CASE OF THE ASSESSEE FOR- FURNISHING THE RETURN OF INCOME UNDER SUB S ECTION (1) OF SECTION 139, IN AN ACCOUNT IN ANY SUCH BANK OR IN STITUTION AS MAYBE SPECIFIED IN AND UTILIZED IN ACCORDANCE WITH A NY SCHEME WHICH THE CENTRAL GOVERNMENT MAY BY NOTIFICATION IN THE OFFICIAL GAZETTE FRAME IN THIS BEHALF AND SUCH RETURN SHALL BE ACCOMPANIED BY A PROOF OF SUCH DEPOSIT; AND, FOR THE PURPOSE OF SUB SECTION (1), THE AMOUNT, IF ANY ALREADY UTILIZED BY THE ASSESSEE FOR THE PURPOSE OF CONSTRUCTION OF THE NEW ASSET TOGETHER WITH THE AMO UNTS DEPOSITED SHALL BE DEEMED TO BE THE COST OF THE NEW ASSE T. CERTAIN OTHER CONDITIONS HAVE BEEN PROVIDED IN THE SAID CLAUSE . IN THE CASE OF THE APPELLANT, THE AFORESAID CONDITIONS HAVE NOT B EEN FULFILLED. MERELY, BECAUSE THE NEW ASSET/FLAT WAS ACQUIRED ON 19.0 1.2011 WITHIN A PERIOD OF 3 YEARS FROM THE DATE OF SALE OF T HE RESIDENTIAL FLAT, UNLESS THE CONDITION OF KEEPING THE DEPOSIT IN A CAPIT AL GAINS SCHEME IS NOT FULFILLED, THE ASSESSEE IS NOT ENTITLED TO T HE CLAIM OF DEDUCTION ON THE UNSPENT AMOUNT. THE ACT DOES NOT ENV ISAGE 4 ITA NO.1330/PN/2016 KEEPING THE AMOUNT IN REGULAR FIXED DEPOSIT ACCOUNTS. THIS IS ALSO NOT IN THE INHERENT SPIRIT OF THE CONDITION LAID DOW N IN SECTION 54(2) OF THE ACT. THEREFORE, THOUGH THE ISSUE REQUIRES A SYMP ATHETIC CONSIDERATION, DUE TO LEGAL BINDING, THE ASSESSEES CLAI M CANNOT BE ALLOWED. THEREFORE I AM CONSTRAINED TO UPHOLD THE F INDINGS OF THE AO. 6. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 7. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT INITIALL Y THE ASSESSEE HAD BOOKED A FLAT IN A SCHEME OF VILAS JAVDEK AR ECO HOMES AT VILLAGE SUS NEAR PUNE FOR A CONSIDERATION OF RS.35,44,000/- AND HAS PAID A SUM OF RS.6,80,000/- AS ADVAN CE VIDE MEMORANDUM OF UNDERSTANDING DATED 29-05-2010. SINC E THE SAID PROJECT WAS UNDULY DELAYED THE ASSESSEE CANC ELLED THE BOOKING AND GOT REFUND OF RS.6,80,000/- AND TOOK A FLAT UN DER CONSTRUCTION AT A-16/602, SUNWAY BUILDING OF MEGAPOLIC HOUSING PROJECT, RAJIV GANDHI INFOTECH PARK, PHASE-3, MOUJ E MEAN, TAL. MULSHI, DIST. PUNE VIDE AGREEMENT EXECUTED AND REGISTERED WITH THE OFFICE OF SUB-REGISTRAR ON 19-01-2011 AT A COST OF RS.40,68,798/-. REFERRING TO PARA 2.9 OF THE WRITTEN SUBMISSION OF THE PAPER BOOK HE DREW THE ATTENTION OF TH E BENCH TO THE FOLLOWING DETAILS : 2.9 AS EVIDENCE FROM THE ENTRIES IN THE BANK PASS BOO K PERUSED BY THE AO, AS AGAINST THE AMOUNT OF LTCG OF RS.37,55,8 30/- ONLY, ASSESSEE HAS INVESTED FOR AND TOWARDS CONSTRUCTION AND PURC HASE OF NEW HOUSE BY OR BEFORE : AS UPTO PARTICULARS RS. 31 - 08 - 2010 EXTENDED DUE DATE FOR RETURN U/S.139(1) NIL 31 - 03 - 2012 DUE DATE OF RETURN U/S.139(4) 24,87,609/ - 28 - 06 - 2012 DATE OF HEARING BEFORE AO 28,79,727/ - 08 - 12 - 2012 3 YEARS FROM SALE OF OLD PROPERTY 40,55,957/ - 15 - 02 - 2014 DATE OF POSSESSION OF NEW FLAT 40,68,798 5 ITA NO.1330/PN/2016 8. REFERRING TO THE DECISION OF THE PUNE BENCH OF THE TRIB UNAL IN THE CASE OF ACIT VS. ASHA ASHOK BOOB REPORTED IN 69 ITR (TRIBUNAL) 321 HE SUBMITTED THAT THE AMOUNT PAID FOR PURCHASE OF THE NEW ASSET BEFORE THE DUE DATE OF FILING OF RETURN U/S.1 39(4) IS ELIGIBLE FOR DEDUCTION U/S.54 OF THE ACT OUT OF THE CAPITAL G AIN. HE ACCORDINGLY SUBMITTED THAT ATLEAST THE AMOUNT INVESTED TOWARDS ACQUISITION OF THE NEW PROPERTY BEFORE THE DUE DATE OF FILING OF RETURN U/S.139(4) SHOULD BE ALLOWED AS DEDUCTION U/S.54 OF T HE I.T. ACT. HE ALSO RELIED ON THE FOLLOWING DECISIONS WHERE IT H AS BEEN HELD THAT ASSESSEE CAN INVEST THE UNSPENT AMOUN T OF LONG TERM CAPITAL GAIN IN THE CAPITAL GAIN ACCOUNT SCHEME TILL T HE PERIOD PRESCRIBED U/S.139(4) OF THE I.T. ACT, 1961 : 1. CIT VS. JAGTAR SINGH CHAWLA (2013) 259 CTR 0388 ( P&H) 2. CIT VS. MRS. JAGRITY AGGARWAL (2011) 339 ITR 610 ( P&H) 3. CIT VS. RAJESH KUMAR JALAN (2006) 286 ITR 274 4. CIT VS. SMT. B. S. SHANTAKUMARI -ITA 165/2014 (K ARNATAKA) 5. KISHOR H. GALAIYA VS. ITO (2012) 150 TTJ 0444 (MUM BAI) 6. JAGAN NATH SINGH LODHA VS. ITO (2004) 85 TTJ (JD) 173 7. FATIMA BAI VS. ITO (2009) 32 DTR 243 (KARNATAKA) 8. NIPUN MEHEROTRA VS. ACIT (2008) 113 TTJ 223 (BANG ALORE) 9. DCIT, CIRCLE-1, NASHIK VS. ASHOK DEOKISHAN BHUTADA ITA NO. 966/PN/2011 (PUNE ITAT) 9. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HA ND DREW THE ATTENTION OF THE BENCH TO THE PROVISIONS OF SEC TION 54(2) AND SUBMITTED THAT THE AMOUNT OF CAPITAL GAIN WHICH IS NOT APPROPRIATED BY THE ASSESSEE TOWARDS THE PURCHASE OF THE NEW ASSET WITHIN 1 YEAR BEFORE THE DATE ON WHICH THE TRANSFE R OF THE ORIGINAL ASSET TOOK PLACE OR WHICH IS NOT UTILIZED BY HIM FOR THE PURCHASE OR CONSTRUCTION OF THE NEW ASSET BEFORE THE D ATE OF FURNISHING THE RETURN OF INCOME U/S.139 SHALL BE DEPOSITED B Y HIM BEFORE FURNISHING SUCH RETURN AND THE SAME REFERS TO PROVISIONS OF SECTION 139(1). THEREFORE, FOR CLAIMING 6 ITA NO.1330/PN/2016 DEDUCTION/S.54, THE ASSESSEE SHOULD HAVE INVESTED THE CA PITAL GAIN TOWARDS PURCHASE OF THE FLAT BEFORE THE DUE DATE OF FILING OF RETURN U/S.139 OR DEPOSITED THE UNSPENT AMOUNT IN THE CAPITAL GAIN ACCOUNT SCHEME. SINCE THE AO HAS ALREADY GRANTED EXEMPTION U/S.54(1) TO THE EXTENT OF RS.6,80,000/- WHICH HA S BEEN PAID BY THE ASSESSEE FOR BOOKING THE FLAT, THEREFORE, HE IS NOT ENTITLED TO ANY FURTHER BENEFIT U/S.54(2) OF THE I.T. ACT. 10. THE LD. COUNSEL FOR THE ASSESSEE IN HIS REJOINDER SUBM ITTED THAT FOR DEPOSIT IN CAPITAL GAIN ACCOUNT SCHEME, THE DUE D ATE IS AS PER 139(1) WHILE FOR INVESTMENT TOWARDS PURCHASE OF TH E HOUSE, THE PERIOD IS UPTO THE DATE PRESCRIBED U/S.139(4) O F THE I.T. ACT., 1961. 11. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AO AND THE CIT(A) AND T HE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. I HAVE ALSO CONSIDE RED THE VARIOUS DECISIONS CITED BEFORE ME. THERE IS NO DISPUTE TO THE FACT THAT THE ASSESSEE HAS EARNED LONG TERM CAPITAL GAIN TO THE EXTENT OF RS.39,80,737/- WHICH HE HAS CLAIMED AS EXEMPT U/S.54 OF T HE I.T. ACT. I FIND THE AO HAS ALLOWED DEDUCTION U/S.54(1) TO THE EXTENT OF RS.6,80,000/- FOR INVESTMENT IN PURCHASE OF NEW PROPERTY WHICH HAS BEEN PAID BY THE ASSESSEE BEFORE TH E DUE DATE OF RETURN U/S.139(1) OF THE I.T. ACT. 12. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSE E THAT FOR CLAIMING DEDUCTION U/S.54 WHATEVER AMOUNT INVESTE D BY THE ASSESSEE WITHIN THE TIME LIMIT UPTO THE DUE DATE OF R ETURN U/S.139(4) IS ELIGIBLE. SINCE THE ASSESSEE IN THE INSTANT CAS E HAS INVESTED AN AMOUNT OF RS.24,87,609/- BEFORE THE DUE DATE OF 7 ITA NO.1330/PN/2016 RETURN U/S.139(4), I.E. UPTO 31-03-2012, THEREFORE, THE ASSES SEE IS ENTITLED TO THE BENEFIT OF DEDUCTION OF RS.24,87,609/- U/S.5 4 OF THE I.T. ACT. 13. I FIND SOME FORCE IN THE ABOVE SUBMISSION OF THE ASSESSEE. I FIND AN IDENTICAL ISSUE HAD COME UP BEFORE THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ASHA ASHOK BOOB (SUPRA) AND THE TRIBUNAL WHILE CONSIDERING AN IDENTICAL ISSUE HAS HELD THAT INVESTMENT MADE WITHIN THE TIME LIMIT UPTO WHICH RETURN CAN BE FILED U/S.139(4) IS ALLOWABLE AS DEDUCTION U/S.54/54F OF THE I.T . ACT. THE RELEVANT OBSERVATION OF THE TRIBUNAL AT PARA 13 AND 14 OF THE ORDER READ AS UNDER : 13. NOW COMING TO THE AMOUNT OF DEDUCTION TO BE AL LOWED U/S.54F OF THE ACT, WE FIND IT IS AN ADMITTED FACT TH AT THE ASSESSEE HAS NOT DEPOSITED THE SALE PROCEEDS IN THE SPECIFIED BANK A CCOUNT TILL 31- 03-2009. THE ASSESSEE ONLY MADE PAYMENT OF RS.55,40,625 /- TILL 31- 03-2009 TOWARDS PURCHASE OF FLAT. IN THE CASE DECIDED BY THE HON'BLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF MS. JAGRITY AGGARWAL (SUPRA) THE ASSESSEE SOLD HER HOUSE PROPERTY FOR RS.45 LAKHS ON JANUARY 13, 2006, AND HAVING PURCHASED A NEW RESIDENTIAL PROPERTY ON JANUARY 2, 2007, CLAIMED DEDUCTION UNDE R SECTION 54 OF THE INCOME-TAX ACT, 1961. THE ASSESSING OFFICER DECLINE D THE CLAIM HOLDING THAT THE ASSESSEE FAILED TO DEPOSIT THE AMOUNT I N THE CAPITAL GAINS ACCOUNT SCHEME AND ALSO FAILED TO PURCHASE HOUSE P ROPERTY BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME. THE COMMISSIONER (APPEALS) HELD THAT THE ASSESSEE HAD PURCHASED A NEW RESID ENTIAL PROPERTY ON 2 ND JANUARY, 2007, AND THE DUE DATE ACCORDING TO SECTIO N 139(4) WAS MARCH 31 2007, AND, THUS, THE ASSESSEE HAD CO MPLIED WITH THE PROVISIONS OF SECTION 54 OF THE ACT. THIS ORDE R WAS AFFIRMED BY THE TRIBUNAL. ON FURTHER APPEAL BY THE REVENUE , THE HONBLE HIGH COURT HELD AS UNDER (SHORT NOTES) : THE ASSESSEE SOLD HER HOUSE PROPERTY FOR RS.45 LAKHS ON JANUARY 13, 2006, AND HAVING PURCHASED A NEW RESIDENT IAL PROPERTY ON JANUARY 2, 2007, CLAIMED DEDUCTION UNDE R SECTION 54 OF THE INCOME-TAX ACT, 1961. THE ASSESSING OFFICER DECLINED THE CLAIM HOLDING THAT THE ASSESSEE FAILED TO DEPOSIT THE AMOUNT IN THE CAPITAL GAINS ACCOUNT SCHEME AND AL SO FAILED TO PURCHASE HOUSE PROPERTY BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME. THE COMMISSIONER (APPEA LS) HELD THAT THE ASSESSEE HAD PURCHASED A NEW RESIDENTIAL PROPERTY ON JANUARY 2, 2007, AND THE DUE DATE ACCOR DING TO SECTION 139(4) WAS MARCH 31, 2007, AND, THUS, THE ASSESS EE HAD COMPLIED WITH THE PROVISIONS OF SECTION 54 OF THE ACT. THIS ORDER WAS AFFIRMED BY THE TRIBUNAL. ON APPEAL : 8 ITA NO.1330/PN/2016 HELD, DISMISSING THE APPEAL, THAT THE SALE OF THE ASSET H AD TAKEN PLACE ON JANUARY 13, 2006, FAILING IN THE PRE VIOUS YEAR 2006-07, THE RETURN COULD BE FILED BEFORE THE END O F THE RELEVANT ASSESSMENT YEAR 2007-08, I.E. MARCH 31, 2007. THUS, SUB-SECTION (4) OF SECTION 139 PROVIDES THE EXTENDED PE RIOD OF LIMITATION AS AN EXCEPTION TO SUB-SECTION (1) OF SEC TION 139 OF THE ACT. SUB-SECTION (4) WAS IN RELATION TO THE T IME ALLOWED TO AN ASSESSEE UNDER SUB-SECTION (1) TO FILE THE RETURN. THEREFORE, SUCH PROVISION WAS NOT AN INDEPENDENT PROVI SION, BUT RELATES TO THE TIME CONTEMPLATED UNDER SUB-SECTION (1) OF SECTION 139. THEREFORE, SUB-SECTION (4) HAD TO BE REA D ALONG WITH SUB-SECTION (1). THEREFORE, THE DUE DATE FOR FU RNISHING THE RETURN OF INCOME ACCORDING TO SECTION 139(1) OF THE ACT WAS SUBJECT TO THE EXTENDED PERIOD PROVIDED UNDER SUB - SECTION (4) OF SECTION 139 OF THE ACT. 14. WE FIND FOLLOWING THE ABOVE DECISIONS, THE PUNE B ENCH OF THE TRIBUNAL IN THE CASE OF ASHOK DEOKISHAN BHUTADA (SUPRA) HAS ALLOWED THE CLAIM OF DEDUCTION MADE BY THE ASSESSEE WHE RE THE INVESTMENTS WERE MADE WITHIN THE TIME LIMIT UP TO WHI CH THE RETURN CAN BE FILED U/S. 139(4). SINCE, IN THE INSTANT CASE ADMITTEDLY THE ASSESSEE HAS MADE PAYMENT OF RS.55,40,625/- TILL 31-03-20 09 WHICH IS THE DUE DATE OF FILING OF RETURN U/S. 139(4), THER EFORE, FOLLOWING THE DECISIONS CITED (SUPRA) WE HOLD THAT THE ASSESSEE IS EN TITLED TO CLAIM DEDUCTION U/S.54F ONLY TO THE EXTENT OF RS.55,4 0,625/- AS AGAINST RS.100,03,125/- ALLOWED BY THE LD. CIT(A). A S REGARDS THE RELIANCE PLACED BY THE LD. DR ON THE DECISION OF THE HON'BLE KERALA HIGH IN THE CASE OF V.R. DESAI (SUPRA) IS CONCERNED THE SAME IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. IN THAT CASE IT WAS HELD THAT THE ASSESSEE WAS NOT ENTITLED TO DEDUCTION U/S. 54F BECAUSE HE NEITHER DEPOSITED THE SALE PROCEEDS IN THE SPECIFIED BANK ACCOUNT BEFORE THE DUE DATE NOR UTILIZED THE SAME FOR CONSTRU CTION OF THE HOUSE IN TERMS OF PROVISIONS OF SECTION 54F. HOWEVER, I N THE INSTANT CASE THE ASSESSEE HAS UTILIZED A PART OF CAPITAL GAIN TOW ARDS PURCHASE OF FLAT WHICH IS NOT IN DISPUTE. THEREFORE, THE SAID DECISION IS DISTINGUISHABLE AND NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. IN VIEW OF THE ABOVE DISCUSSION, WE ARE OF THE CONSIDER ED OPINION THAT THE ASSESSEE IS ENTITLED TO DEDUCTION U/S. 54F TO TH E EXTENT OF RS.55,40,625/- ONLY. WE HOLD AND DIRECT ACCORDINGLY . THE GROUNDS RAISED BY THE REVENUE ARE PARTLY ALLOWED. 14. SINCE I AM A PARTY TO THE ABOVE DECISION, THEREFORE, FOLLOWING THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNA L IN THE CASE OF ASHA ASHOK BOOB (SUPRA) I HOLD THAT THE ASS ESSEE IS ENTITLED TO DEDUCTION U/S.54 OF THE I.T. ACT TO THE EXTEN T OF RS.24,87,609/- . GROUNDS OF APPEAL NO. 1 TO 3 BY THE ASSE SSEE ARE ACCORDINGLY ALLOWED. 9 ITA NO.1330/PN/2016 15. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PART LY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29-07-2016. SD/- ( R.K. PANDA ) ACCOUNTANT MEMBER PUNE ; DATED : 29 TH JULY, 2016. '# $# / COPY OF THE ORDER FORWARDED TO : / BY ORDER , // TRUE COPY // // TRUE COPY // // $ % //UE &' % * / SR. PRIVATE SECRETARY *, / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT (A) - V, PUNE 4. THE CIT-V, PUNE 5. $ %%* , * , SMC BENCH / DR, ITAT, SMC BENCH PUNE; 6. 2 / GUARD FILE.