T.S.R.Khannaiyan, Coimbatore V. ACIT, Coimbatore

ITA 1914/CHNY/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64391 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 10-10-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 29-11-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANIRUDH RAI
• Assessee Lawyers: G BASKAR
• Keywords: Capital asset
• Section: 143(3); 54B; 54

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL D BENCH, CHENNAI. BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER & SHRI S.S. GODARA, JUDICIAL MEMBER I.T.A. NO.1914/MDS/2011 ASSESSMENT YEAR : 2006-07 SHRI T.S.R. KHANNAIYAN, PROP: HINDUSTAN HEAVY ELECTRICALS, NO. 67, AVARAMPALAYAM ROAD, K.R. PURAM, COIMBATORE 641 006. [PAN:AFZPK7832C] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE II, COIMBATORE. (APPELLANT) (RESPONDENT) A PPELLANT BY : SHRI G. BAS KAR, ADVOCATE RESPONDENT BY : SHRI ANIRUDH RAI, CIT - DR DATE OF HEARING : 10.10.2012 DATE OF PRONOUNCEMENT : 10.10.2012 ORDER PER S.S. GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL IS DIRECTED AGAINST THE ORD ER OF THE COMMISSIONER OF INCOME TAX (APPEALS) I, COIMBATORE DATED 14.10.2011 PASSED IN APPEAL NO. 318/10-11 FOR THE ASSESSMENT Y EAR 2006-07 IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961 [IN SHORT THE ACT]. 2. REFERRING TO THE GROUNDS RAISED IN THE APPEAL, THE AR FOR THE ASSESSEE BEFORE US HAS SUBMITTED THAT HE PRESSES ONLY GROUND NO. 3.1, WHEREIN THE PRINCIPAL CONTENTION OF THE ASSESSEE IS THAT THE CI T(A) SHOULD NOT HAVE I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO.1914 .1914 .1914 .1914/M/ /M/ /M/ /M/11 1111 11 2 AFFIRMED THE ORDER OF THE ASSESSING OFFICER TAXING THE AMOUNT WITHDRAWN BY THE ASSESSEE FROM CAPITAL GAINS ACCOUNT SCHEME, 198 8 [IN SHORT THE CGAS] AND NOT UTILIZING IT AS PER ABOVE SCHEME. I T IS THE SUBMISSION OF THE AR THAT WHILE CONFIRMING THE ASSESSING AUTHORITYS ORDER, THE CIT(A) HAS NOT CONSIDERED THE TRUE MANDATE OF PROVISO TO SECTION 5 4B(2) OF THE ACT AND THEREFORE, THE AMOUNT IN QUESTION COULD NOT HAVE BE EN CHARGED TO TAX IN THE PREVIOUS YEAR RELEVANT TO THE IMPUGNED ASSESSMENT Y EAR. ON THE OTHER HAND, THE CONTENTION OF THE REVENUE IS THAT THE CIT (A) IS RIGHTLY CONFIRMED THE ORDER OF THE ASSESSING AUTHORITY. SINCE BOTH PA RTIES ARE AT VARIANCE IN THEIR RESPECTIVE PLEADING ABOVE SAID, WE FRAME FOLL OWING ISSUE FOR OUR APT ADJUDICATION: WHETHER THE CIT(A) HAS RIGHTLY CONFIRMED THE ORDER OF THE ASSESSING AUTHORITY TAXING THE AMOUNT WITHDRAWN BY THE ASSESS EE FROM CGAS FOR WANT OF PROPER UTILIZATION IN THE PREVIOUS YEAR RELEVANT TO IMPUGNED ASSESSMENT YEAR 2006-07? IF SO, WHETHER THE ORDER O F THE CIT(A) TO THIS EFFECT IS LIABLE TO BE MODIFIED OR UPHELD PER RESPECT STANDS OF THE PARTIES? 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S AN INDIVIDUAL ENGAGED IN THE BUSINESS OF MANUFACTURING ELECTRICAL TRANSFO RMERS. ON 31.10.2006, HE FILED HIS RETURN; ADMITTING INCOME OF ` .11,55,567/- AND AGRICULTURAL INCOME OF ` 6.50 LAKHS. THE SAID RETURN AS FOLLOWED BY A REVISE D RETURN. THIS TIME, THE ASSESSEE DECLARED INCOME OF ` .13,68,782/- AND AGRICULTURAL INCOME OF ` . 6.50 LAKHS. IN THE ENCLOSURES FILED WITH THE RETURN, HE HAD ALSO ADMITTED LONG TERM I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO.1914 .1914 .1914 .1914/M/ /M/ /M/ /M/11 1111 11 3 CAPITAL GAINS ARISING FROM SALE OF LAND SITES. THER EAFTER, THE ASSESSING OFFICER COMPLETED SCRUTINY ASSESSMENT UNDER SECTION 143(3) OF THE ACT MAKING ADDITION OF ` .2,56,60,484/- BY DISALLOWING SHORT TERM CAPITAL LO SS OF ` .78,19,227/- AND ADOPTED SALE CONSIDERATION AS ` .2,31,58,000/- INSTEAD OF ` .37,00,000/- AS DECLARED BY THE ASSESSEE. AS THE RE CORD OF THE INSTANT APPEAL REVEALS, THE ASSESSEE CHALLENGED THE ASSESSM ENT ORDER ABOVE SAID IN AN APPEAL BEFORE THE CIT(A), WHEREIN IT WAS UPHE LD. 4. AS THE FACTS EMERGE FROM THE ASSESSMENT ORDER, IN SUBSEQUENT ASSESSMENT YEAR I.E. ASSESSMENT YEAR 2007-08, THE A SSESSING OFFICER SOUGHT DETAILS FROM THE ASSESSEE PERTAINING TO THE ASSET PURCHASED WHILST FINALIZING THE ASSESSMENT UNDER SECTION 143(3) OF T HE ACT. IT WAS ASSESSEES CONTENTION THAT HE HAD PURCHASED THE ASS ETS IN QUESTION FROM VARIOUS AMOUNTS INVESTED IN CGAS UNDER SECTION 54 B OF THE ACT IN ASSESSMENT YEAR 2005-06. THE ASSESSING OFFICER VERI FIED THE ASSESSEES BANK ACCOUNT. MORE PARTICULARLY, THE CGAS AND AMO UNTS SAID TO HAVE BEEN TRANSFERRED BY THE ASSESSEE WHILST DEPOSITING THE S ALE CONSIDERATION OF THE PROPERTIES SOLD BY HIM. THE ASSESSING OFFICER AFTER PERUSING THE DETAILS NOTICED THAT THE ASSESSEE HAD WITHDRAWN PAYMENTS DE POSITED IN THE SAID SCHEME DURING THE ASSESSMENT YEAR 2005-06 WITHOUT P URCHASING ANY ASSET DURING THE FINANCIAL YEAR 2005-06 RELEVANT TO THE A SSESSMENT YEAR 2006-07, THAT TOO, IN A ROUTINE MANNER. IN HIS OPINION, THE SCHEME IN QUESTION I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO.1914 .1914 .1914 .1914/M/ /M/ /M/ /M/11 1111 11 4 ENVISAGED THAT THE DEPOSITOR CONCERN WOULD UTILIZE THE AMOUNT WITHDRAWN WITHIN 60 DAYS. THEREFORE, THE ASSESSING OFFICER IS SUED NOTICE DATED 20.12.2010 TO THE ASSESSEE FOR REOPENING THE ASSESS MENT ALREADY FINALIZED FOR IMPUGNED ASSESSMENT YEAR 2006-07. 5. THE ASSESSEE FILED REPLY TO THE REOPENING NOTIC E ON 27.12.2010 EXPLAINING THE DETAILS IN UTILIZATION OF SUM DEPOSI TED IN THE CGAS. THE ASSESSEES EXPLANATION IN VERBATIM IS HEREBY REPROD UCED AS UNDER: I HAVE MADE AN ADVANCE TO PURCHASE THE PROPERTY AFT ER WITHDRAWING THE SUM OF ` .3.33 CRORES FROM THE CAPITAL ACCOUNTS SCHEME DURING THE YEAR 2005- 2006 . AFTER THE WITHDRAWAL, MY ONLY SON MET WITH AN ACCID ENT AND HE SEVERELY INJURED ON 28.01.2006. HE FIGHTING FOR HIS LIFE AND ADMITTED IN THE HOSPITAL. I WAS FORCED TO STAY WITH HIM AND HENCE THE DELAY I N REGISTRATION FOR A PERIOD OF 6 MONTHS. HOWEVER, THE REGISTRATION WITHIN A PERIOD OF 2 YEAR S WAS VERY MUCH COMPLIED WITH THE PROVISIONS SPECIFIED HI SECTION 548. THE DELAY IN UTILISATION OF THE AMOUNT WITHDRAWN WA S DELAYED DUE TO THE ABOVE CIRCUMSTANCES BEYOND MY WILL AND CONTR OL. THE DELAY IN UTILISATION OF THE AMOUNT WITHDRAWN IS ONLY A DEVIATION OF THE TIME LIMIT 60 DAYS BUT NOT INTENTI ONAL TO CIRCUMVENT THE PROVISIONS OF SEC.54B. I HAVE ENCLOSED DETAILS NECESSARY FOR THE EXPLANATI ON. HOWEVER, THE ASSESSING OFFICER WAS NOT CONVINCED. T HEREFORE, A NOTICE UNDER SECTION 143(2) OF THE ACT WAS SERVED . AFTER HEARING THE I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO.1914 .1914 .1914 .1914/M/ /M/ /M/ /M/11 1111 11 5 ASSESSEE, THE ASSESSING OFFICER NEGATIVED THE ASSES SEES EXPLANATIONS VIDE ORDER DATED 21.12.2010. IN HIS OPINION, IN CGAS, THE ASSESSEE HAD DEPOSITED ` .33,70,000/- ON 29.10.2005 AND THEREAFTER, ON 31.10 .2005, HE AGAIN DEPOSITED ` .3,00,00,000/-. THEREAFTER, HE WITHDREW PAYMENTS OF ` .1,60,00,000/-, ` .1,55,00,000/- AND ` .20,03,392/- [INCLUSIVE OF INTEREST EARNED ` .1,33,392/-] ON 29.11.2005, 17.01.2006 AND 30.01.20 06 RESPECTIVELY. PER ASSESSING OFFICER, ON 05.03.2006, THE ASSESSEE PURCHASED LAND BY PAYING CONSIDERATION OF ` .25,00,000/-. IN THE OPINION OF THE ASSESSING OFFICER, ONLY THIS TRANSACTION WAS LIABLE TO BE ACCEPTED UNDER THE PROVISIONS OF SECTION 54B OF THE ACT READ WITH C GAS. THE ASSESSING OFFICER FURTHER OBSERVED THAT THE ASSESSEE PURCHASE D PROPERTIES ONLY ON 23.08.2006 I.E. WELL BEYOND 60 DAYS FROM THE WITHDR AWAL OF THE AMOUNTS STATED HEREIN ABOVE. THOUGH THE ASSESSEE HAD CONTEN DED BEFORE THE ASSESSING OFFICER THAT HE HAD PAID ADVANCE IN RESPE CT OF THE TRANSACTIONS IN QUESTION I.E. ` .65,00,000/- ON 18.01.2006, ` .13,40,000/- ON 23.01.2006 AND ` .20,30,000/- ON 26.01.2006 AND IN SUPPORT OF THE SA ME, HE HAD ALSO ENCLOSED UNREGISTERED SALE AGREEMENTS, THE SAME WER E REPELLED BY THE ASSESSING OFFICER THROUGH A FINDING THAT THE ADVANC E MONEY AS CLAIMED BY THE ASSESSEE HAD NOT BEEN REFLECTED FROM THE REGIST ERED SALE DEEDS. IN THE OPINION OF THE ASSESSING OFFICER, THE ASSESSEE HAD FAILED TO PROVE AS TO WHAT WAS THE EXACT AMOUNT PAID TO THE VENDORS CONCERNED IN VARIOUS INSTALLMENTS AS ALLEGED. ACCORDINGLY, THE ASSESSING OFFICER HELD THAT THE ASSESSEE HAD I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO.1914 .1914 .1914 .1914/M/ /M/ /M/ /M/11 1111 11 6 FAILED TO COMPLY WITH THE PROVISIONS OF CGAS POSTUL ATING UTILIZATION OF AMOUNTS WITHDRAWN WITHIN 60 DAYS OR TO REDEPOSIT TH E SAME BACK IN THE SCHEME. IN THIS MANNER, THE ASSESSING OFFICER TREAT ED THE WITHDRAWN AMOUNT OF ` .3,07,78,292/- AS LONG TERM CAPITAL GAINS FOR THE P URPOSE OF FINALIZING THE ASSESSMENT IN ASSESSEES CASE. 6. THE ASSESSEE PREFERRED APPEAL AGAINST THE ASSES SMENT ORDER BEFORE THE CIT(A), WHEREIN AS WELL, THE COMPUTATION OF CAP ITAL GAINS AS MADE BY THE ASSESSING OFFICER ABOVE SAID HAS BEEN CONFIRMED BY THE CIT(A). IT IS, IN THIS BACKDROP OF FACTS THAT THE ASSESSEE IS IN APPEAL. 7. IN SUPPORT OF THE ISSUE FRAMED, THE AR FOR THE ASSESSEE HAS SUBMITTED A CHART CONTAINING PARTICULARS OF SALE TRANSACTIONS OF AGRICULTURAL LAND SOLD/PURCHASED BY THE ASSESSEE. THE SAME IS HEREBY REPRODUCED AS UNDER: S1. DATE EVENT 1 01.04.04, 21.04.04, 28.07.04, 08.10.04, 21.03.05 PORTIONS OF NOTIFIED AGRICULTURAL LAND SOLD BY ASSE SSEE 2 29.10.05 DEPOSITED ` . 33,70,000/ - INTO C.G ALC SCHEME 3 31.10.05 FURTHER DEPOSITED ` .3,00,00,000/- INTO C.G A/C SCHEME 4 29.11.05 WITHDRAWN A SUM OF ` . 1,60,00,000/- FROM C.G A/C SCHEME 5 17.01.06 FURTHER WITHDRAWN ` .1,55,00,000/- FROM C.G A/C SCHEME 6 17.01.06 ADVANCE OF ` . 2,05,00,000/- PAID TO SMT. MUTHAYAMMAL 7 18.01.06 ADVANCE OF ` .65,00,000 PAID TO SYED MOHIDEEN (REPRESENTING AS POWER AGENT OF 97 OTHERS VIDE POAS EXECUTED IN 2 004) 8 23.01.06 FURTHER ADVANCE OF ` .13,40 ,000 PAID TO SYED MOHIDEEN I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO.1914 .1914 .1914 .1914/M/ /M/ /M/ /M/11 1111 11 7 9 26.01.06 FURTHER ADVANCE OF ` .20,30 ,000 PAID TO SYED MOHIDEEN. TOTALLY ` .98,70,000/- PAID TILL DATE. 10 30.01.06 FURTHER ADVANCE OF ` .20,00,000/- PAID TO SMT. MUTHAYAMMAL 11 30.01.06 WITHDRAWN ` .20,03,392/- FROM C.G ACCOUNTS SCHEME 12 05.03.06 AGRICULTURAL LAND PURCHASED FOR ` .20,00,000/- DOCT NO.86/2006 13 23.08.06 DOCUMENT NOS.3929 - 3932/2006 EXECUTED BY SYED MOHI DEEN (FOR SELF AND AS POWER AGENT OF 97 OTHERS) 14 01.12.06 THE ENTIRE ADVANCE PAID RECEIVED BACK FROM SMT.MUTHAYAMMAL 15 07.12.06 PURCHASED AGRICULTURAL LAND FOR ` .56,48,414/-. DOC NO.3856/06 - K.A.CHANDRASEKAR, DOCT NO.3854/06 - K.N. RASAPPAN & DOC NO.3855/06 FROM K.V.RAMAMURTHI 16 14.12.06 PURCHASED AGRICULTURAL LAND FOR ` . 56,48,474/- DOCUMENT NO. 3713/2006 FROM N. KRISHNASAMY SINCE THE CHART ABOVE SAID ONLY CONTAINED NECESSARY PARTICULARS ALREADY ON RECORD, WHICH HAS NOT BEEN OBJECTED BY THE DR, WE T AKE IT ON RECORD. 8. TAKING CUE FROM THE ABOVE SAID DETAILS, IT IS T HE CONTENTION OF THE AR THAT THE ASSESSEES FIRST TRANSACTION OF SALE OF HI S LAND WAS ON 01.04.2004. THEREAFTER, HE HAS REFERRED TO SECTION 54B(2) PROVI SO AND CONTENDED THAT THE AMOUNT IN QUESTION CANNOT BE CHARGED UNDER SECTION 45 OF THE ACT IN THE IMPUGNED ASSESSMENT YEAR I.E. ASSESSMENT YEAR 2006- 07 ON THE GROUND THAT TIME DURATION OF TWO YEARS AS STIPULATED IN TH E PROVISO EXPIRES ON 01.04.2006 I.E. PREVIOUS YEAR RELEVANT TO ASSESSMEN T YEAR 2007-08 AND NOT IMPUGNED ASSESSMENT YEAR 2006-07. TO BUTTRESS HIS A RGUMENT, HE HAS ALSO RELIED ON THE CASE LAW OF MUMBAI ITAT TITLED MONISH A H. PATEL VS. ITO (2008) 22 SOT 329 (MUMBAI) DATED 29.02.2008 AND PRA YED FOR ACCEPTANCE OF THE APPEAL. I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO.1914 .1914 .1914 .1914/M/ /M/ /M/ /M/11 1111 11 8 9. ON THE OTHER HAND, THE DR REPRESENTING THE REVE NUE HAS PLACED RELIANCE ON THE ORDER OF THE CIT(A) AS WELL AS THE REASONS CONTAINED THEREIN AND PRAYED FOR UPHOLDING THE SAME. 10. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH PARTIE S AND ALSO GONE THROUGH THE RELEVANT FINDINGS, DOCUMENTS IN THE PAPER BOOK AS WELL AS CASE LAW CITED. FACTS OF THE CASE ARE UNDISPUTED. THE ONLY STRIFE B ETWEEN THE PARTIES IS THAT THE ASSESSEE CLAIMED THAT THE AMOUNT OF CAPITAL GAI NS CANNOT BE CHARGED UNDER SECTION 45 OF THE ACT IN THE PREVIOUS YEAR RELEVANT TO THE IMPUGNED ASSESSMENT YEAR. WE MAKE IT CLEAR THAT THIS APPEAL PERTAINS TO THE ASSESSMENT YEAR 2006-07 AND THE DURATION OF THE REL EVANT PREVIOUS YEAR IS FROM 01.04.2005 TO 31.03.2006. A BARE PERUSAL OF TH E DETAILS SUPPLIED BY THE AR IN THE CHART REPRODUCED HEREINABOVE REVEALS THAT THE ASSESSEE SOLD HIS AGRICULTURAL LAND FOR THE FIRST TIME FOLLOWED BY OT HER TRANSACTIONS ON 01.04.2004 AND DEPOSITED THE CONSIDERATION MONEY IN CGAS. THE PARTIES ARE NOT IN DISPUTE THAT THE ASSESSEE FAILED TO UTIL IZE THE AMOUNT WITHDRAWN WITHIN 60 DAYS. WE REPEAT THAT THE ASSESSEE HAS NOT RAISED ANY ISSUE BEFORE US JUSTIFYING THE NON-UTILIZATION OF THE AMOUNT WIT HIN 60 DAYS UNDER THE SPECIFIC CLAUSES OF THE SCHEME. HIS ONLY CASE IS TH AT SINCE UNDER NECESSARY STATUTORY PROVISIONS I.E. SECTION 54B, THE AMOUNT C AN ONLY BE CHARGED UNDER SECTION 45 OF THE ACT AS THE INCOME OF PREVIOUS Y EAR IN WHICH PERIOD OF 2 YEARS FROM THE DATE OF TRANSFER OF THE ORIGINAL ASS ET EXPIRES, WHICH COMES TO I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO.1914 .1914 .1914 .1914/M/ /M/ /M/ /M/11 1111 11 9 BE 01.04.2006 [2 YEARS FROM 01.04.2004], THEREFORE, SECTION 45 IS NOT APPLICABLE HERE. WE DEEM IT APPROPRIATE TO REPRODUC E SECTION 54B OF THE ACT AS HEREIN BELOW: 54B. [(1)] [SUBJECT TO THE PROVISIONS OF SUB-SECTION (2) , WHERE THE CAPITAL GAIN ARISES] FROM THE TRANSFER OF A CAPITAL ASSET BEING LAND WHICH, IN THE TWO YEARS IMMEDIATELY PRECEDING THE D ATE ON WHICH THE TRANSFER TOOK PLACE, WAS BEING USED BY THE ASSESSEE OR A PARENT OF HIS FOR AGRICULTURAL PURPOSES [(HEREINAFTER REFERRED TO AS THE ORIGINAL ASSET)], AND THE ASSESSEE HAS, WITHIN A PERIOD OF T WO YEARS AFTER THAT DATE, PURCHASED ANY OTHER LAND FOR BEING USED FOR A GRICULTURAL PURPOSES, THEN, INSTEAD OF THE CAPITAL GAIN BEING C HARGED TO INCOME TAX AS INCOME OF THE PREVIOUS YEAR IN WHICH THE TRANSFE R TOOK PLACE, IT SHALL BE DEALT WITH IN ACCORDANCE WITH THE FOLLOWING PROV ISIONS OF THIS SECTION, THAT IS TO SAY, (I) IF THE AMOUNT OF THE CAPITAL GAIN IS GREATER TH AN THE COST OF THE LAND SO PURCHASED (HEREINAFTER REFERRED TO AS THE NEW AS SET), THE DIFFERENCE BETWEEN THE AMOUNT OF THE 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 PER IOD OF THREE YEARS OF ITS PURCHASE, THE COST 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 CHARGE D UNDER SECTION 45; AND FOR THE PURPOSE OF COMPUTING IN RESPECT OF THE NEW ASSET ANY CAPITAL GAIN ARISING FROM ITS TRANSFER WITHIN A PER IOD OF THREE YEARS OF ITS PURCHASE, THE COST SHALL BE REDUCED, BY THE AMO UNT OF THE CAPITAL GAIN.] [(2) THE AMOUNT OF THE CAPITAL GAIN WHICH IS NOT UTILISED BY THE ASSESSEE FOR THE PURCHASE OF THE NEW ASSET BEFORE T HE DATE OF FURNISHING THE RETURN OF INCOME UNDER SECTION 139, SHALL BE DE POSITED BY HIM BEFORE FURNISHING SUCH RETURN [SUCH DEPOSIT BEING M ADE IN ANY CASE NOT LATER THAN THE DUE DATE APPLICABLE IN THE CASE OF T HE ASSESSEE FOR FURNISHING THE RETURN OF INCOME UNDER SUB-SECTION ( 1) OF SECTION 139] IN AN ACCOUNT IN ANY SUCH BANK OR INSTITUTION AS MAY B E SPECIFIED IN, AND UTILISED IN ACCORDANCE WITH, ANY SCHEME5 WHICH THE CENTRAL GOVERNMENT MAY, BY NOTIFICATION IN THE OFFICIAL GAZ ETTE, FRAME IN THIS BEHALF AND SUCH RETURN SHALL BE ACCOMPANIED BY PROO F OF SUCH DEPOSIT; AND, FOR THE PURPOSES OF SUBSECTION (1), THE AMOUNT , IF ANY, ALREADY UTILISED BY THE ASSESSEE FOR THE PURCHASE OF THE NE W ASSET TOGETHER WITH I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO.1914 .1914 .1914 .1914/M/ /M/ /M/ /M/11 1111 11 10 THE AMOUNT SO DEPOSITED SHALL BE DEEMED TO BE THE C OST OF THE NEW ASSET: PROVIDED THAT IF THE AMOUNT DEPOSITED UNDER THIS SUB-SECTION IS NOT UTILISED WHOLLY OR PARTLY FOR THE PURCHASE OF THE N EW ASSET WITHIN THE PERIOD SPECIFIED IN SUB-SECTION (1), THEN, (I) THE AMOUNT NOT SO UTILISED SHALL BE CHARGED UND ER SECTION 45 AS THE INCOME OF THE PREVIOUS YEAR IN WHICH THE PERIOD OF TWO YEARS FROM THE DATE OF THE TRANSFER OF THE ORIGINAL ASSET EXPIRES; AND (II) THE ASSESSEE SHALL BE ENTITLED TO WITHDRAW SUC H AMOUNT IN ACCORDANCE WITH THE SCHEME AFORESAID. IF WE INTERPRET THE TERMS OF THE STATUTORY PROVISI ON, MORE PARTICULARLY, THE PROVISO, WE FIND THAT THE ASSESSEES CONTENTION DESERVES TO BE ACCEPTED. WE REITERATE THE FACTUAL POSITION THAT HE SOLD THE PROPERTY FOR THE FIRST TIME ON 01.04.2004. THEREFORE, EVEN AFTER HE DID NOT UTILIZ E THE AMOUNTS DEPOSITED IN CGAS, STILL THE SAME CAN ONLY BE CHARGED TO TAX U NDER SECTION 45 OF THE ACT AS THE INCOME OF THE PREVIOUS YEAR IN WHICH T HE PERIOD OF 2 YEARS FROM THE DATE OF TRANSFER OF THE ORIGINAL ASSET EXPIRES. IN THIS CASE, THE TIME DURATION OF 2 FROM 01.04.2004 (SUPRA) YEARS EXPIRES ON 01.04.2006 I.E. PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 2007-08, MEANING THEREBY THAT THE SAID AMOUNT HAS BEEN WRONGLY SOUGHT TO BE CHARG ED BY REVENUE UNDER SECTION 45 OF THE ACT IN THE IMPUGNED ASSESSMENT YEAR 2006-07. THEREFORE, WE ARE UNABLE TO AGREE WITH THE FINDINGS OF THE CIT(A) AS IN OUR OPINION, THE ISSUE IN HAND IS LIABLE TO BE DECIDED IN FAVOUR OF THE ASSESSEE. IN THE LIGHT THERE OF, WE HOLD THAT THE CIT(A) IN A FFIRMING THE FINDINGS OF THE ASSESSING OFFICER HAS NOT BEEN FOLLOWED THE MANDATE OF SECTION 54B OF THE I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO.1914 .1914 .1914 .1914/M/ /M/ /M/ /M/11 1111 11 11 ACT BY CHARGING THE ASSESSEES AMOUNT UNDER SECTI ON 45 OF THE ACT IN THE ASSESSMENT YEAR IN HAND I.E. 2006-07. CONSEQUENTLY, ON LEGAL ISSUE IN HAND ONLY WE ALLOW THIS APPEAL. SINCE THERE IS NO QUARRE L BETWEEN THE PARTIES ON MERITS, THEREFORE, THE OTHER GROUNDS RAISED HAVE NO T BEEN DEALT WITH. HENCE, THE APPEAL STANDS PARTLY ALLOWED QUA GROUND NO. 3 O NLY. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS P ARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON WEDNESDAY, THE 10 TH OF OCTOBER, 2012 AT CHENNAI. SD/- SD/- (ABRAHAM P. GEORGE) ACCOUNTANT MEMBER (S.S. GODARA) JUDICIAL MEMBER CHENNAI, DATED, THE 10.10.2012 VM/- TO: THE ASSESSEE//A.O./CIT(A)/CIT/D.R.