Rohtash Singh, Gurgaon V. DCIT, Gurgaon

ITA 218/DEL/2016

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 3786 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2011-2012
• Appeal Filed On: 15-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Period of limitation; Set aside; Capital Gains
• Section: 54B; 54F; 139(1); 139(4); 54; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: C, NEW DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER ITA NO.218/DEL./2016 ASSESSMENT YEAR: 2011-12 SHRI ROHTASH SINGH, L-32/5, DLF PHASE-II, GURGAON VS. DCIT, CIRCLE-2, GURGAON PAN :AHIPS2749B (APPELLANT) (RESPONDENT) ORDER PER O.P. KANT, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORD ER DATED 21/10/2015 PASSED BY THE LEARNED CIT(APPEALS)-2, GU RGAON [IN SHORT THE LD. CIT(A)] FOR ASSESSMENT YEAR 2011-12 , RAISING FOLLOWING GROUNDS: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER DATED 30 TH MARCH, 2014, AS PASSED BY THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-2, GURGAON [HEREINAFTER REFERRED TO AS THE A.O.] AND AS UPHELD BY THE COMMISSIONER OF INCOME- TAX (APPEALS)-II, GURGAON [HEREINAFTER REFERRED TO AS THE CIT(A)] VIDE ORDER 21 ST OCTOBER, 2015 IS VOID AB INITIO. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) ERRED IN UPHOLDING THE DISALLOWANCE TO THE TUNE OF RS.17, 28,000/- ON ACCOUNT OF FENCING AND COMMISSION EXPENSES. APPELLANT BY SHRI P.C. YADAV, ADV. RESPONDENT BY SHRI BHAGWATI CHARAN, SR.DR DATE OF HEARING 04.11.2020 DATE OF PRONOUNCEMENT 06.11.2020 2 ITA NO.218/DEL./2016 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) GROSSLY ERRED IN HOLDING THAT AO WAS CORRECT IN RES TRICTING THE BENEFIT OF SECTION 54B ONLY TO THE INVESTMENTS MADE BY THE APPELLANT UPTO THE DATE OF FILING OF INCOME-TAX RET URN. ALL THE ABOVE MENTIONED GROUNDS ARE WITHOUT PREJUDI CE AND INDEPENDENT OF EACH OTHER. THAT THE APPELLANT PRAYS FOR LEAVE TO ADD, ALTER, A MEND AND/OR VARY THE GROUND(S) OF APPEAL AT OR BEFORE THE TIME OF HEARING. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSE SSEE, AN INDIVIDUAL, FILED RETURN OF INCOME FOR THE YEAR UND ER CONSIDERATION ON 29/09/2011, DECLARING INCOME OF 8,63,99,390/- AND AGRICULTURE INCOME OF 9,51,286/-. THE RETURN OF INCOME FILED BY THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT A ND STATUTORY NOTICES WERE ISSUED AND COMPLIED WITH. IN THE SCRUT INY ASSESSMENT COMPLETED ON 30/03/2014 UNDER SECTION 14 3(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT), THE LEARNED ASSESSING OFFICER MADE CERTAIN ADDITIONS/DISALLOWAN CES. ON FURTHER APPEAL, THE LD. CIT(A) PARTLY ALLOWED THE A PPEAL OF THE ASSESSEE. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFO RE THE INCOME- TAX APPELLATE TRIBUNAL (IN SHORT THE TRIBUNAL) RA ISING THE GROUNDS AS REPRODUCED ABOVE. 3. BEFORE US, THE PARTIES APPEARED THROUGH VIDEOCONFER ENCING FACILITY. THE LEARNED COUNSEL OF THE ASSESSEE ALSO FILED A WRITTEN SYNOPSIS ELECTRONICALLY. 4. THE ASSESSEE HAS RAISED THREE GROUNDS. THE FIRST G ROUND IS GENERAL IN NATURE AND GROUND NO. 2 IS IN RELATION T O DISALLOWANCE OF 17,28,000/- CLAIM TO HAVE BEEN INCURRED BY THE ASS ESSEE ON FENCING OF LAND AND COMMISSION EXPENSES. THE GROUND NO.3 IS IN RESPECT OF RESTRICTION OF BENEFIT OF SECTION 54B OF THE ACT BY THE LEARNED CIT(A). 3 ITA NO.218/DEL./2016 5. FIRSTLY, WE TAKE GROUND NO. 3 OF THE APPEAL. THE B RIEF FACTS QUA THE GROUND RAISED ARE THAT THE ASSESSEE IN THE RETURN OF INCOME CLAIMED DEDUCTION OF 5,53,52,300/- UNDER SECTION 54B OF THE ACT AGAINST THE LONG-TERM CAPITAL GAIN FOR F OLLOWING INVESTMENTS MADE FOR PURCHASE OF AGRICULTURE LAND: DATE AREA AMOUNT (IN RS.) 19/08/2010 26K 8835000 30/03/2011 15K 19M 15765000 04/07/2011 19K 19M 3887825 04/08/2011 5K 0M 8218200 02/09/2011 2K 0M 1322500 27/09/2011 4K 0M 2367500 07/03/2012 2K 0M 1322500 07/03/2012 OK 11 M 362200 07/03/2012 7K 10M 4936900 07/03/2012 2K 14M 1781900 07/03/2012 3K 18M 2212750 07/03/2012 24 K 5 M 15929350 5.1 ACCORDING TO THE ASSESSING OFFICER, THE INVESTMENT OF 88,35,000/- MADE ON 19/08/2010, WAS PRIOR TO THE DA TE OF THE SALE OF THE LAND ON WHICH THE CAPITAL GAIN AROSE AN D THEREFORE, IT WAS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 54B OF THE ACT. 5.2 FURTHER, THE ASSESSING OFFICER HELD THAT ONLY THE AMOUNT UTILIZED/INVESTED TILL THE DUE DATE OF THE FILING O F THE RETURN OF INCOME UNDER SECTION 139(1) WAS ELIGIBLE FOR DEDUCT ION UNDER SECTION 54B OF THE ACT AND THE REMAINING AMOUNT WOU LD BE ELIGIBLE FOR DEDUCTION ONLY IS SUCH AMOUNT WAS DEPO SITED IN THE ACCOUNT IN A SPECIFIED BANK OR INSTITUTION BEFORE T HE DUE DATE AS PROVIDED UNDER SECTION 139(1) OF THE ACT. THE ASSES SING OFFICER FOUND THAT ONLY TWO AMOUNTS I.E. 1,57,65,000/- INVESTED ON 4 ITA NO.218/DEL./2016 30/03/2011 AND 38,87,825/- INVESTED ON 04/07/2011, TOTALLING TO 1,96,52,825/- WAS ELIGIBLE FOR DEDUCTION UNDER SECTION 54B OF THE ACT. 5.3 THE LD. CIT(A) FOLLOWED HIS OWN DECISION IN THE CAS E OF SH VIJAY CHOUDHARY IN APPEAL NO. 74/14-15 FOR ASSESSMEN T YEAR 2012-13, WHEREIN HE DISCUSSED THE DECISIONS OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT-2, CHANDIGARH VS. JAG RITI AGRAWAL (2011) 15 TAXMAN.COM 146 (PUNJAB AND HARYANA) AND O THER DECISIONS. IN THE CASE OF THE VIJAY CHOUDHARY (SUPRA ), THE LD. CIT(A) CONCLUDED, THE LEGAL REQUIREMENT FOR ELIGIBI LITY OF DEDUCTION UNDER SECTION 54 OF THE ACT AS UNDER: 6.17 KEEPING IN VIEW THE AFORESAID CASE LAWS AND C IRCULAR, THE LEGAL POSITION THAT EMERGES IS THAT AN ASSESSEE WOU LD BE ELIGIBLE FOR DEDUCTION U/S 54 ON UNUTILIZED PORTION OF CAPITAL G AINS ONLY IF HE SATISFIES THE FOLLOWING TWO CONDITIONS:- 1. THE UNUTILIZED PORTION IS DEPOSITED IN A AN ACCO UNT IN A SPECIFIED BANK OR INSTITUTION BEFORE ACTUALLY FURNI SHING THE RETURN OF INCOME AND SUCH RETURN OF INCOME IS ACCOM PANIED BY THE PROOF OF SUCH DEPOSIT ( REFERENCE : HON'BLE KER ALA HIGH COURT DECISION IN THE CASE OF CIT, COCHIN V/S V.R. DESAI (SUPRA)). 2. SUCH DEPOSITS BEING MADE NOT LATER NOT LATER TH AN THE EXTENDED DATE AS APPLICABLE IN THE CASE OF ASSESSEE FOR FURNISHING THE INCOME U/S 139(4) (REFERENCE: THE HONBLE PUNJAB & HARYANA COURT DECISIONS IN THE CASE OF SUI T. .JUGRITI AGGNRWAL (SUPRA) AND SH. JAGTAR SINGH CHAWLA (SUPRA ). THUS THE BENEFIT OF UTILIZING THE CAPITAL GAINS UPT O THE EXTENDED DATE AS PROVIDED U/S 139(4) OR DEPOSITING THE UNUTILIZED PART OF CAPITAL GAINS IN AN ACCOUNT IN A SPECIFIED HANK OR INSTITUTION UPTO THE EXTENDED DATE AS PROVI DED U/S 139(4) WOULD BE ALLOWABLE ONLY UPTO THE DATE OF ACT UAL FILING OF RETURN BY THE ASSSESSEE. 5 ITA NO.218/DEL./2016 5.4 FOLLOWING THE ABOVE PRINCIPLE, THE LD. CIT(A) REST RICTED THE DEDUCTION UNDER SECTION 54B OF THE ACT TILL THE DAT E OF FILING OF RETURN OF INCOME BY THE ASSESSEE OBSERVING AS UNDER : 6.4 THE PROVISIONS OF SECTION 5413 ARC PARA MATERI A TO THE PROVISIONS OF SECTION 54. IT IS A FACT ON RECORD TH AT THE APPELLANT HAD FILED HIS RETURN ON 29.09.2011, THEREFORE, THE AMOU NT UTILISED BY HIM TOWARDS PURCHASE OF AGRICULTURAL LAND OR DEPOSITED IN AN ACCOUNT IN A SPECIFIED BANK OR INSTITUTION, TILL THAT DATE ONL Y CAN BE ALLOWED AS DEDUCTION U/S 54BB OF THE IT ACT. IT IS ALSO A FACT ON RECORD THAT THE APPELLANT HAD UTILISED ONLY FOLLOWING AMOUNTS TOWAR DS PURCHASE OF AGRICULTURAL LAND BY THAT DATE: 30/03/2011 15K 19M 15765000 04/07/2011 19K 19M 3887825 04/08/2011 5K 0 M 8218200 02/09/2011 2K OM 1322500 27/09/2011 4K 0M 2367500 FURTHER, NO AMOUNT WAS DEPOSITED IN AN ACCOUNT IN A SPECIFIED BANK OR INSTITUTION TILL THE DATE OF ACTUALLY FILING THE RETURN OF INCOME. I HE APPELLANT WAS THEREFORE ELIGIBLE FOR DEDUCTION U/S 5413 ONLY ON THE AMOUNT INVESTED ON PURCHASE OF AGRICULTURAL LAND AS ABOVE OUT OF WHICH DEDUCTION OF RS. 1.96.52.825 ON ACCOUNT OF IN VESTMENTS MADE ON 30/03/2011 AND 04/07/2011 HAS ALREADY BEEN ALLOW ED BY THE A(). THE AC) IS ACCORDINGLY DIRECTED TO ALLOW FURTH ER DEDUCTION U/S 54B IN RESPECT OF AMOUNT UTILIZED TOWARDS PURCHASE OF AGRICULTURAL LAND UPTO THE DATE OF ACTUAL FILING OF RETURN FOR T HE CURRENT ASSESSMENT YEAR. THE DISALLOWANCE OF EXCESS DEDUCTI ON CLAIMED BY THE APPELLANT ON ACCOUNT OF AMOUNT SPENT ON PURCHAS E OF AGRICULTURAL LAND AFTER THE DATE OF ACTUAL FILING OF RETURN OF I NCOME MADE BY THE AO IS CONFIRMED. 5.5 BEFORE US, THE LEARNED COUNSEL OF THE ASSESSEE SUB MITTED THAT IN THE CASE OF VIJAY CHOUDHARY, THE TRIBUNAL IN ITA NO. 6432/DEL./2015 FOR ASSESSMENT YEAR 2012-13, REVERSE D THE DECISION OF THE LD. CIT(A) AND HELD THAT INVESTMENT IN SPECIFIED SCHEME OF GOVERNMENT BANK IS NOT A PRECONDITION FOR CLAIM OF THE DEDUCTION UNDER SECTION 54, IF INVESTMENT IS MADE I N PURCHASE OR 6 ITA NO.218/DEL./2016 CONSTRUCTION OF RESIDENTIAL HOUSE. THE LEARNED COUN SEL ALSO SUBMITTED THAT IN VIEW OF THE DECISION OF THE JURIS DICTIONAL HIGH COURT IN THE CASE OF JAGRITI AGRAWAL (SUPRA), THE A SSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 54B OF THE ACT FOR THE INVESTMENT MADE IN PURCHASE OF AGRICULTURE LAND TIL L THE EXTENDED DATE OF FILING OF THE RETURN OF INCOME AS PROVIDED UNDER SECTION 139(4) OF THE ACT. 5.6 ON THE OTHER HAND, THE LEARNED DR RELIED ON THE OR DER OF THE LOWER AUTHORITIES AND SUBMITTED THAT IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF THE PRAKASH NA TH KHANNA VS CIT (2004) 266 ITR 1, THE DUE DATE OF THE FILING OF THE RETURN OF INCOME SHOULD BE UNDER SECTION 139(1) OF THE ACT AN D NOT UNDER SECTION 139(4) OF THE ACT. 5.7 WE HAVE HEARD RIVAL SUBMISSION OF THE PARTIES AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE FIND THAT THE L D. CIT(A) IN THE CASE OF VIJAY CHOUDHARY (SUPRA) HAS DISCUSSED THE D ECISION OF THE HONBLE SUPREME COURT IN THE CASE OF PRAKASH NA TH KHANNA(SUPRA) AND DECISION OF THE HONBLE PUNJAB AN D HARYANA HIGH COURT IN THE CASE OF JAGRITI AGRAWAL (SUPRA). THE LD. CIT(A) HIMSELF HAS ADMITTED THAT DECISION OF THE HONBLE S UPREME COURT IN THE CASE OF PRAKASH NATH KHANNA (SUPRA) IS NOT WITH REGARD TO THE PROVISION OF SECTION 54 OF THE ACT. IN THE IMPU GNED ORDER, LD. CIT(A) HAS REPRODUCED THE RELEVANT PART OF HIS DECI SION IN THE CASE OF VIJAY CHOUDHARY, WHICH IS REPRODUCED AS UNDER: 6.15 HOWEVER, KEEPING IN VIEW THE FACT THAT THE HO NBLE JURISDICTIONAL HIGH COURT HAS DECIDED THIS ISSUE IN THE TWO CASES REFERRED TO ABOVE AS BEING THE EXTENDED PERIOD UPTO THE DATE PROVIDED U/S 139(4), THE DECISION OF HONBLE SUPRE ME COURT REFERRED TO ABOVE NOT BEING SPECIFICALLY WITH REGARD TO THE PROVISIONS OF SECTION 54 OF THE IT ACT AND THE DECISION OF HONBL E JURISDICTIONAL 7 ITA NO.218/DEL./2016 HIGH COURT REFERRED TO ABOVE BEING LATER DECISION, I RESPECTFULLY FOLLOWING THE DECISIONS OF THE HONBLE JURISDICTION AL HIGH COURT ON THIS ISSUE. 5.8 THUS, THE LD. CIT(A) HAS CLAIMED TO HAVE FOLLOWED THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT I N THE CASE OF JAGRITI AGRWAL (SUPRA), BUT ACCORDING TO HIM, THE B ENEFIT OF UTILISING THE CAPITAL GAINS AMOUNT TO THE EXTENDED DATE AS PROVIDED UNDER SECTION 139(4) WOULD BE ALLOWABLE ON LY TO THE DATE OF THE ACTUAL FILING OF RETURN OF INCOME BY THE ASS ESSEE. IN THIS CASE, LIMITATION FOR FILING OF THE RETURN OF INCOME IN TERMS OF SECTION 139(4) EXPIRES ON 31/03/2012 BUT THE ACTUAL RETURN OF INCOME WAS FILED ON 29/09/2011 AND, THEREFORE, THE LD. CIT(A) RESTRICTED THE DEDUCTION FOR THE AMOUNT INVESTED IN PURCHASE OF THE AGRICULTURE LAND TILL 29/09/2011. 5.9 WE FIND THAT HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF JAGRITI AGRAWAL (SUPRA) HELD AS UNDER: 10. HAVING HEARD LEARNED COUNSEL FOR THE PARTIES, WE A RE OF THE OPINION THAT SUB-S. (4) OF S. 139 OF THE ACT IS, IN FACT, A PROVISO TO SUB- S. (1) OF S. 139 OF THE ACT. SEC. 139 OF THE ACT FI XES THE DIFFERENT DATES FOR FILING THE RETURNS FOR DIFFERENT ASSESSEES. IN THE CASE OF ASSESSEE AS THE RESPONDENT, IT IS 31ST DAY OF JULY OF THE AS SESSMENT YEAR IN TERMS OF CL. (C) OF THE EXPLN. 2 TO SUB-S. (1) OF S . 139 OF THE ACT, WHEREAS SUB-S. (4) OF S. 139 PROVIDES FOR EXTENSION IN PERIOD OF DUE DATE IN CERTAIN CIRCUMSTANCES. IT READS AS UNDER : '(4) ANY PERSON WHO HAS NOT FURNISHED A RETURN WITH IN THE TIME ALLOWED TO HIM UNDER SUB-S. (1), OR WITHIN THE TIME ALLOWED UNDER A NOTICE ISSUED 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 C OMPLETION OF THE ASSESSMENT WHICHEVER IS EARLIER : PROVIDED THAT WHERE THE RETURN RELATES TO A PREVIOU S YEAR RELEVANT TO THE ASSESSMENT YEAR COMMENCING ON THE 1ST DAY OF AP RIL, 1988 OR ANY EARLIER ASSESSMENT YEAR, THE REFERENCE TO ONE Y EAR AFORESAID 8 ITA NO.218/DEL./2016 SHALL BE CONSTRUED AS A REFERENCE TO TWO YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR.' 11. A READING OF THE AFORESAID SUB-SECTION WOULD SHOW THAT IF A PERSON HAS NOT FURNISHED THE RETURN OF THE PREVIOUS YEAR WITHIN THE TIME ALLOWED UNDER SUB-S. (1) I.E., BEFORE 31ST DAY OF JULY OF THE ASSESSMENT YEAR, THE ASSESSEE CAN FILE RETURN BEFOR E THE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT YE AR. 12. 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 (SIC 2006-07) I.E. 31ST MARCH, 2007. THUS, SUB-S. (4) OF S. 139 PROVIDES EXTENDED PERIOD OF LIMITATION AS AN EXCEPTION TO SU B-S. (1) OF S. 139 OF THE ACT. SUB-S. (4) IS IN RELATION TO THE TIME ALLO WED TO AN ASSESSEE UNDER SUB-S. (1) TO FILE RETURN. THEREFORE, SUCH PR OVISION IS NOT AN INDEPENDENT PROVISION, BUT RELATES TO TIME CONTEMPL ATED 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 DIVISI ON BENCH OF KARNATAKA AND GAUHATI HIGH COURTS IN FATIMA BAI AND RAJESH KUMAR JALAN CASES (SUPRA) RESPECTIVELY. 13. IN VIEW OF THE ABOVE, WE FIND THAT DUE DATE FOR FU RNISHING THE RETURN OF INCOME AS PER S. 139(1) OF THE ACT IS SUB JECT TO THE EXTENDED PERIOD PROVIDED UNDER SUB-S. (4) OF S. 139 OF THE A CT. 5.10 WE ALSO NOTE THAT THE COORDINATE BENCH IN THE CAS E OF SMT. VATSALA ASTHANA IN ITA NO. 5635/DEL/2016 FOR ASSESS MENT YEAR 2012-13 HAS ALLOWED BENEFIT OF DEDUCTION UNDER SECT ION 54 OF THE ACT FOR THE PAYMENT MADE TOWARDS PURCHASE OF THE RE SIDENTIAL HOUSE UP TO THE DUE DATE OF THE FILING OF THE RETUR N OF INCOME PRESCRIBED UNDER SECTION 139(4) OF THE ACT. THE REL EVANT FINDING OF THE TRIBUNAL IS REPRODUCED AS UNDER: 15. REGARDING THE PAYMENT MADE BY THE ASSESSEE BEF ORE 31/03/2014, HON'BLE HIGH COURT OF RAJASTHAN IN THE CASE OF SHANKAR LAI SAINI (SUPRA) HELD THAT, WHERE ASSESSEE , AN INDIVIDUAL DEPOSITED UNUTILIZED SALE CONSIDERATION IN CAPITAL GAINS SCHEME WITHIN THE DUE DATE OF FILING OF BELATED TAX RETURN UNDER SECTION 139(4), THE CAPITAL GAINS RELIEF UNDER SECTION 54F OF THE ACT WOULD BE ALLOWABLE. IN THE CASE OF K. RAMACHANDRA RAO (SUPRA ), THE HON'BLE KARNATAKA HIGH COURT HELD THAT ASSESSEE HAVING INVE STED ENTIRE SALE CONSIDERATION IN CONSTRUCTION OF RESIDENTIAL H OUSE WITHIN THREE 9 ITA NO.218/DEL./2016 YEARS FROM THE DATE OF THE TRANSFER, HE COULD NOT B E DENIED EXEMPTION UNDER SECTION 54F ON THE GROUND THAT HE D ID NOT DEPOSIT SAID AMOUNT IN CAPITAL GAINS ACCOUNT SCHEME BEFORE DUE DATE PRESCRIBED UNDER SECTION 139(1) OF THE ACT. IN THE CASE OF KISHORE H GALAYA (SUPRA), THE COORDINATE BENCH HAS HELD THAT THE DATE OF FILING RETURN OF INCOME UNDER SECTION 139(1) FOR THE PURPO SE OF UTILIZATION OF THE AMOUNT FOR PURCHASE/CONSTRUCTION OF RESIDENTIAL HOUSE HAS TO BE CONSTRUED WITH RESPECT TO THE DUE DATE PRESCRIBED F OR FILING RETURN OF INCOME UNDER SECTION 139(4) OF ACT. THE RELEVANT FI NDING IS REPRODUCED AS UNDER: 'AMOUNT EXCEEDING CAPITAL GAINS ARISING FROM SALE O F OLD RESIDENTIAL HOUSE HAVING BEEN PAID BY ASSESSEE TO A BUILDER WITHIN THREE YEARS FOR CONSTRUCTION OF NEW RESIDENT IAL HOUSE, ASSESSEE WAS ENTITLED TO EXEMPTION UNDER S. 54 NOTWITHSTANDING THAT ASSESSEE OBTAINED POSSESSION A FTER THREE YEARS AND ALSO FAILED TO DEPOSIT CAPITAL GAIN S IN THE CAPITAL GAINS ACCOUNT SCHEME BEFORE DUE DATE OF FIL LING RETURN OF INCOME UNDER S. 139(1) FOR RELEVANT YEAR.' 16. IN VIEW OF THE ABOVE DECISIONS, THE PAYMENT MAD E BY THE ASSESSEE TOWARDS PURCHASE OF RESIDENTIAL HOUSE UP T O THE DUE DATE OF FILING OF THE RETURN OF INCOME PRESCRIBED UNDER SECTION 139(4) OF THE ACT I.E. 31/03/2014 IS ALLOWABLE FOR CONSIDERING DE DUCTION UNDER SECTION 54F OF THE ACT. RESPECTFULLY, FOLLOWING THE ABOVE DECISIONS, WE ACCORDINGLY DIRECT THE ASSESSING OFFICER TO CONS IDER AMOUNT UTILIZED BY THE ASSESSEE FOR PURCHASE OF THE HOUSE TILL 31/03/2014(WHICH INCLUDES THE PAYMENT OF RS.50,36,4 22/- MADE UP TO 31/07/2012) FOR DEDUCTION UNDER SECTION 54F O F THE ACT. 5.11 FURTHER, THE LD. CIT(A) IN THE INSTANT CASE HAS RE LIED ON HIS DECISION IN THE CASE OF VIJAY CHOUDHARY(SUPRA). THE TRIBUNAL IN THE CASE OF VIJAY CHOUDHARY(SUPRA), REVERSED THE DEC ISION OF THE LD. CIT(A) OBSERVING AS UNDER: 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL THE MATERIAL AVAILABLE ON RECORD. THE HONBLE KARNATAKA HIGH COU RT IN CASE OF SHRI K RAMCHANDRA RAO (SUPRA) HELD AS UNDER: 3 2) WHETHER THE ASSESSEE INVESTS THE ENTIRE SALES CONSIDERATION IN CONSTRUCTION OF A RESIDENTIAL HOUS E WITHIN THREE YEARS FROM THE DATE OF TRANSFER CAN HE BE DEN IED EXEMPTION UNDER SECTION 54F ON THE GROUND THAT HE D ID NOT 10 ITA NO.218/DEL./2016 DEPOSIT THE SAID AMOUNT IN CAPITAL GAINS ACCOUNT SC HEME BEFORE THE DUE DATE PRESCRIBED UNDER SECTION 139(1) OF THE IT ACT? .. 4. RE. QUESTION NO. 2: AS IS CLEAR FROM SUB SECTION (4) IN THE EVENT OF TH E ASSESSEE NOT INVESTING THE CAPITAL GAINS EITHER IN PURCHASIN G THE RESIDENTIAL HOUSE OR IN CONSTRUCTING A RESIDENTIAL HOUSE WITHIN THE PERIOD STIPULATED IN SECTION 54F(1), IF THE ASS ESSEE WANTS THE BENEFIT OF SECTION 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 WANT OF CL AIM EXEMPTION FROM PAYMENT OF INCOME TAX BY RETAINING T HE CASH, THEN THE SAID AMOUNT IS TO BE INVESTED IN THE SAID ACCOUNT IF THE INTENTION IS NOT TO RETAIN CASH BUT TO INVEST I N CONSTRUCTION OR ANY PURCHASE OF THE PROPERTY AND IF SUCH INVESTM ENT IS MADE WITHIN THE PERIOD STIPULATED THEREIN, THEN SEC TION 54F(4) IS NOT AT ALL ATTRACTED AND THEREFORE THE CONTENTIO N THAT THE ASSESSEE HAS NOT DEPOSITED THE AMOUNT IN THE BANK A CCOUNT AS STIPULATED AND THEREFORE, HE IS NOT ENTITLED TO THE BENEFIT EVEN THOUGH HE HAS INVESTED THE MONEY IN CONSTRUCTI ON IS ALSO NOT CORRECT. 5. FOR THE AFORESAID REASONS BOTH THE SUBSTANTIAL QUESTIONS OF LAW ARE ANSWERED IN FAVOUR OF THE ASSE SSEE AND AGAINST THE REVENUE. THEREFORE, WE DO NOT SEE MERIT IN ANY OF THE APPEALS. ACCORDINGLY, ALL THE FOUR APPEALS ARE DISMISSED. IN THE PRESENT CASE, THE ASSESSEE HAS PURCHASED THE RESIDENTIAL PLOT FROM THE SALE PROCEEDS OF THE EARLIER RESIDENTIAL H OUSE. THE SALE PROCEEDS WERE UTILIZED FOR CONSTRUCTION OF RESIDENT IAL HOUSE WITH THE THREE YEARS ITSELF. THE DECISION OF THE HON'BLE KAR NATAKA HIGH COURT IS APT IN THE PRESENT CASE AS THE HON'BLE HIGH COUR T HELD THAT IT IS NOT A PRE-CONDITION TO INVEST THE MONEY IN THE SPEC IFIED CENTRAL GOVT. SCHEME OF THE SALE PROCEEDS IF THE PROPERTY IS PURC HASED AND CONSTRUCTED FOR RESIDENTIAL PURPOSES. THOUGH THE LD . DR TRIED TO DISTINGUISH THE FACTUAL MATRIX BUT THE SAME IS NOT TENABLE AS THE RATIO AND THE FACTS DETERMINED BY THE HON'BLE KARNA TAKA HIGH COURT ARE SIMILAR TO THE PRESENT ASSESSEES CASE AS WELL. THEREFORE, THE APPEAL OF THE ASSESSEE IS ALLOWED. 5.12 THE SECTION 54B IS PARI-MATERIA WITH SECTION 54 OF THE ACT. THUS, THE CASE IN HAND IS SQUARELY COVERED BY THE A BOVE DECISION OF HONBLE HIGH COURT OF PUNJAB & HARYANA AND DECIS ION OF THE TRIBUNAL. BEFORE US, PARTIES COULD NOT GET VERIFIED THE EXACT 11 ITA NO.218/DEL./2016 AMOUNT INVESTED IN PURCHASE OF AGRICULTURAL LAND TI LL THE QUALIFYING PERIOD, THUS, WE FEEL APPROPRIATE TO SET ASIDE THE FINDING OF THE LD. CIT(A) AND RESTORE THE ISSUE IN DISPUTE OF DEDUCTION UNDER SECTION 54B OF THE ACT TO THE FILE OF THE LEARNED ASSESSING OFFICER FOR VERIFYING THE INVESTMENT IN PURCHASE OF AGRICULTURE LAND AND DECIDE THE ISSUE OF DEDUCTION U/S 54B OF THE ACT AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING A DEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. AS PER THE RECORD, WE FIND THAT AGAINST THE ORDER OF THE LEARNED CIT(A), THE REVENUE IS NOT IN APPEAL, WHICH MEANS THE REVENUE HAS ACCEPTED THE DECISION OF THE LD CIT(A). IN VIEW OF THIS FACTUAL POSITION, THE LEARNED ASSESSING OFFICER IS FURTHER DIRECTED THAT HE SHALL NOT WITHDRAW THE DEDUCTION ALREADY GRANTED BY LEARNED C IT(A) AND NOT PUT THE ASSESSEE IN A POSITION WORSE THAN THE POSIT ION AFTER THE IMPUGNED ORDER OF THE LEARNED CIT(A). THE GROUND N O. 3 OF THE APPEAL OF THE ASSESSEE IS ACCORDINGLY ALLOWED FOR T HE STATISTICAL PURPOSES. 6. THE GROUND NO. 3 RELATES TO DISALLOWANCE OF 17,28,000/-ON ACCOUNT OF FENCING AND COMMISSION EXPENSES. WE HAVE HEARD RIVAL SUBMISSION OF THE PARTIES ON THE ISSUE IN DISPUTE. WE FIND THAT THE ASSESSEE CLAIMED EXPENDITURE OF 9,00,000/- AND 8,28,000/- AGAINST INCOME FROM CAPITAL GAINS ON ACC OUNT OF THE PAYMENTS MADE TO SH. PRATAP SINGH AND SH. RAJVIR SI NGH RESPECTIVELY AGAINST COMMISSION AND FENCING WORK. A CCORDING TO THE ASSESSING OFFICER AND THE LD. CIT(A) SUFFICIENT EVIDENCE IN SUPPORT OF THE CLAIM HAS NOT BEEN FILED BY THE ASSE SSEE, WHEREAS ACCORDING TO THE ASSESSEE, HE HAS FILED CONFIRMATIO N OF THE PARTIES AND, THEREFORE, THE ONUS WAS ON THE ASSESSING OFFIC ER AND LD. 12 ITA NO.218/DEL./2016 CIT(A) TO EXAMINE THE SAID PARTIES. WE HAVE ALREADY RESTORED THE ISSUE IN DISPUTE OF THE DEDUCTION UNDER SECTION 54B OF THE ACT TO THE FILE OF THE ASSESSING OFFICER. IN THE FACTS AND CIRCUMSTANCES OF THE ISSUE-IN-DISPUTE AND IN THE INTEREST OF THE JUS TICE, WE FEEL IT APPROPRIATE TO RESTORE THIS ISSUE ALSO TO THE FILE OF THE ASSESSING OFFICER AFRESH FOR NECESSARY VERIFICATION OF THE CL AIM OF THE ASSESSEE. IT IS NEEDLESS TO MENTION THAT THE ASSESS EE SHALL BE AFFORDED ADEQUATE OPPORTUNITY OF BEING HEARD. THE G ROUNDS OF THE APPEAL ARE ACCORDINGLY ALLOWED FOR STATISTICAL PURP OSES. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSES ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH NOVEMBER, 2020. SD/- SD/- (BHAVNESH SAINI) (O.P. KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 6 TH NOVEMBER, 2020. RK/- (D.T.D.S.) COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI