Smt. Hansaben Pravinbhai Patel, Ahmedabad V. The Income Tax Officer, Ward-3(3)(2), Ahmedabad

ITA 2208/AHD/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4099 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2013-2014
• Appeal Filed On: 26-08-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: LALIT P JAIN
• Assessee Lawyers: D R THAKKAR
• Section: 54; 139; 143(3); 54F

Judgement Text

, D IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SMT. MADHUMITA ROY, JUDICIAL MEMBER ./ I.T.A. NO. 2208/AHD/2016 ( ASSESSMENT YEAR : 2013-14) SMT. HANSABEN PRAVINBHAI PATEL BUNGALOW NO. 2, DEVKUTIR PART III, B/H. MADHURYA HOTEL, AMBLI BOPAL ROAD, AHMEDABAD - 380058 / VS. THE INCOME TAX OFFICER WARD-3(3)(2), PRATYAKSH KAR BHAVAN, AHMEDABAD - 380015 ./ ./ PAN/GIR NO. : AIUPP8251C ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI D. R. THAKKAR, A.R. / RESPONDENT BY : SHRI LALIT P. JAIN, SR.D.R. DATE OF HEARING 15/11/2019 !'# / DATE OF PRONOUNCEMENT 08/02/2019 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME TAX (APPEALS)-3, AHMEDABAD (CIT(A) IN SHORT), DATED 2 9.06.2016 ARISING IN THE ASSESSMENT ORDER DATED 31.12.2015 PASSED BY THE ASSESSING ITA NO.2208/AHD/16 [SMT. HANSABEN P. PATEL VS. ITO] A.Y. 2013-14 - 2 - OFFICER (AO) UNDER S. 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT) CONCERNING AY 2013-14. 2. AS PER THE GROUNDS OF APPEAL, THE ASSESSEE HA S CHALLENGED THE ACTION OF THE REVENUE AUTHORITIES IN DENYING DEDUCT ION UNDER S.54F OF THE ACT AMOUNTING TO RS.2,67,18,560/-. 3. BRIEFLY STATED, THE ASSESSEE, AN INDIVIDUAL FILE D ITS RETURN OF INCOME FOR AY 2013-14 BELATEDLY UNDER S.139(4) OF T HE ACT ON 31.03.2014 DECLARING A TOTAL INCOME OF RS.6,996/- T HEREIN. THE RETURN FILED WAS SUBJECTED TO SCRUTINY ASSESSMENT. IN THE COURSE OF THE SCRUTINY ASSESSMENT, THE AO NOTICED THAT THE ASSESS EE HAS SOLD CERTAIN URBAN AGRICULTURAL LAND AT GOTA, AHMEDABAD AT A SAL E CONSIDERATION OF RS.3,50,00,000/- AND AFTER REDUCING INDEX COST OF A CQUISITION OF RS.82,81,440/- DECLARED LONG TERM CAPITAL GAINS AT RS.2,67,18,560/-. AGAINST THE LONG TERM CAPITAL GAINS SO EARNED, THE ASSESSEE CLAIMED EXEMPTION UNDER S.54F OF THE ACT FOR THE FULL AMOUN T OF CAPITAL GAINS OF RS.2,67,18,560/- ON THE GROUND THAT THE ENTIRE S ALE CONSIDERATION OF RS.3,50,00,000/- WAS DEPOSITED IN THE CAPITAL GAIN ACCOUNT SCHEME ON 31.03.2014 I.E. PRIOR TO / ON THE DATE OF FILING OF RETURN OF INCOME. 3.1 ON INQUIRY BY THE AO INTO THE ELIGIBILITY TOWAR DS DEDUCTION UNDER S.54F OF THE ACT SO CLAIMED THE ASSESSEE CONT ENDED THAT THE DEPOSIT IN THE CAPITAL GAIN ACCOUNT SCHEME HAS BEEN MADE ON 31.03.2014 I.E. ON OR BEFORE EXTENDED DUE DATE IN T ERMS OF SECTION 139(4) OF THE ACT INSTEAD OF DEPOSITING IT ON OR BE FORE THE DUE DATE 31- 07-2013 IN TERMS OF SECTION 139(1) OF THE ACT. WHI LE IT WAS THE CASE OF THE ASSESSEE THAT THE BELATED DEPOSIT IN CAPITAL GAIN ACCOUNT SCHEME WITHIN THE EXTENDED DUE DATE UNDER S.139(1) OF THE ACT IS SUFFICIENT COMPLIANCE FOR ELIGIBILITY OF DEDUCTION, THE ASSESS EE ALSO POINTED OUT HER INABILITY TO MAKE DEPOSITS WITHIN THE TIME FRAM E PROVIDED UNDER ITA NO.2208/AHD/16 [SMT. HANSABEN P. PATEL VS. ITO] A.Y. 2013-14 - 3 - S.139(1) OF THE ACT ON THE GROUND THAT SHE HAD RECE IVED ONLY PART PAYMENT TO THE EXTENT OF RS.1.25 CRORES TILL THE D UE DATE SPECIFIED UNDER S. 139(1) OF THE ACT AGAINST THE TOTAL SALE C ONSIDERATION OF RS.3.50 CRORE. IT WAS THUS THE CASE OF THE ASSESSE E THAT IT WAS NOT POSSIBLE FOR HER TO INVEST THE ENTIRE SALE CONSIDER ATION OF RS.3,50,00,000/- ON OR BEFORE 31.07.2013 I.E. DUE D ATE UNDER S.139(1) OF THE ACT. THE ASSESSEE ACCORDINGLY PLEADED BEFOR E THE AO THAT THE INABILITY OF THE ASSESSEE TO DEPOSIT THE MONEY WITH IN THE DUE DATE UNDER S.139(1) OF THE ACT SHOULD BE BORNE IN MIND A ND DEPOSIT IN THE LATER PERIOD WITHIN THE DUE DATE UNDER S.139(4) OF THE ACT SHOULD BE TAKEN AS SUFFICIENT COMPLIANCE OF SECTION 54F OF TH E ACT BY GRANTING LIBERAL CONSTRUCTION TO THE BENEFICIAL PROVISION. 3.2 THE AO HOWEVER DID NOT PAY ANY HEED TO SUCH ARG UMENTS AND HELD THAT SECTION 54F(4) OF THE ACT REQUIRES THAT S UCH DEPOSIT IN CAPITAL GAIN ACCOUNT SCHEME CANNOT BE MADE LATER TH AN DUE DATE APPLICABLE TO THE ASSESSEE FOR FURNISHING THE RETUR N OF INCOME UNDER S.139(1) OF THE ACT. THE AO ACCORDINGLY DECLINED T O GRANT EXEMPTION OF RS.2,67,18,560/- CLAIMED UNDER S.54F OF THE ACT ON THE GROUND THAT BELATED DEPOSITS IN THE SCHEME IS NOT IN TERMS WITH THE PROVISIONS OF THE ACT. CONSEQUENTLY THE AO INCREASED THE ASSESSE D INCOME TO THE EXTENT OF THE EXEMPTION CLAIMED UNDER S.54F OF THE ACT AND ASSESSED THE TOTAL INCOME AT RS.2,67,25,556/- IN PLACE OF RE TURN OF INCOME OF RS.6,996 ONLY. 4. AGGRIEVED, THE ASSESSEE PREFERRED THE APPEAL BE FORE THE CIT(A). 5. THE CIT(A) REVISITED THE SUBMISSIONS MADE ON BEH ALF OF THE ASSESSEE BUT HOWEVER DID NOT FIND MERIT THEREIN EIT HER. THE CIT(A) ACCORDINGLY ENDORSED THE ACTION OF THE AO FOR NON E LIGIBILITY OF EXEMPTION CLAIMED UNDER S.54F OF THE ACT CONCERNING AY 2013-14 IN ITA NO.2208/AHD/16 [SMT. HANSABEN P. PATEL VS. ITO] A.Y. 2013-14 - 4 - QUESTION. THE CIT(A) HOWEVER ENTERTAINED THE ADDIT IONAL GROUND RAISED ON BEHALF OF THE ASSESSEE IN THE FIRST APPEL LATE PROCEEDINGS TOWARDS CREDIT OF TAX PAID IN THE SUBSEQUENT YEAR O F WITHDRAWAL OF THE AMOUNT FROM CAPITAL GAIN ACCOUNT SCHEME. SUITABLE OBSERVATIONS WERE MADE BY THE CIT(A) IN THIS REGARD. 6. AGGRIEVED BY THE DENIAL OF EXEMPTION BY THE REVE NUE AUTHORITIES IN AY 2013-14 IN QUESTION, THE ASSESSEE PREFERRED A PPEAL BEFORE THE TRIBUNAL. 7. THE LEARNED AR FOR THE ASSESSEE REITERATED VARIO US SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES. THE MAIN PLANK OF THE ARGUMENT OF THE ASSESSEE BEFORE US WAS INABILITY OF THE ASSESSE E TO DEPOSIT THE MONEY WITHIN THE PRIOR PERMISSION CONTEMPLATED UNDE R S. 139(1) OF THE ACT OWING TO NON RECEIPT OF SALE CONSIDERATION IN F ULL ON SALE OF ORIGINAL ASSETS BEFORE DUE DATE UNDER S.139(1) OF T HE ACT. THE OTHER PLANK OF CONTENTION BEING THAT TIME LIMITS UNDER S. 139(4) OF THE ACT SHOULD BE RECKONED FOR THE PURPOSE OF ELIGIBILITY O F DEDUCTION UNDER S.54F OF THE ACT. THE LEARNED AR FOR THE ASSESSEE RELIED UPON THE DECISION OF THE CO-ORDINATE BENCH IN SUNAYANA DEVI VS. ITO ITA NO. 996/KOL/2013 ORDER DATED 13.09.2017 AND MRS. SEEMA SABHARWAL VS. ITO ITA NO. 272/CHD/2017 ORDER DATED 05.02.2018 FOR THIS PURPOSE. 8. THE LEARNED DR, ON THE OTHER HAND, RELIED UPON T HE REVENUE AUTHORITIES. 9. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. THE CENTRAL CONTROVERSY IN THE INSTANT CASE IS TOWARDS ALLOWABI LITY OF DEDUCTION UNDER S.54F OF THE ACT HAVING REGARD TO THE DEPOSIT S MADE IN THE DESIGNATED CAPITAL GAIN ACCOUNT SCHEME WITHIN THE E XTENDED DUE DATE UNDER S.139(4) OF THE ACT. ITA NO.2208/AHD/16 [SMT. HANSABEN P. PATEL VS. ITO] A.Y. 2013-14 - 5 - 9.1 THE REVENUE SEEKS TO DENY THE DEDUCTION ON THE GROUND THAT EXPLICIT CONDITIONS OF SECTION 54F OF THE ACT HAS N OT BEEN FULFILLED IN AS MUCH AS THE ASSESSEE HAS FAILED TO DEPOSIT THE C ONSIDERATION (ARISING FROM SALE OF ORIGINAL ASSET) BEFORE THE DUE DATE CO NTEMPLATED UNDER S.139(1) OF THE ACT AS ENJOINED BY SECTION 54F(4) O F THE ACT. THE CONTROVERSY REVOLVES AROUND THE PHRASEOLOGY OF SECT ION 54F(4) OF THE ACT. IT WILL THUS BE APT TO REFER TO SECTION 54F(4 ) OF THE ACT WITH WHICH WE PRESENTLY CONCERNED: 54F. (1). (2).. (3).. [(4) THE AMOUNT OF THE NET CONSIDERATION WHICH IS N OT APPROPRIATED BY THE ASSESSEE TOWARDS THE PURCHASE OF THE NEW ASS ET MADE WITHIN ONE YEAR BEFORE THE DATE ON WHICH THE TRANSFER OF T HE ORIGINAL ASSET TOOK PLACE, OR WHICH IS NOT UTILISED BY HIM FOR THE PURCHASE OR CONSTRUCTION OF THE NEW ASSET BEFORE THE DATE OF FU RNISHING THE RETURN OF INCOME UNDER SECTION 139, SHALL BE DEPOSITED BY HIM BEFORE FURNISHING SUCH RETURN [SUCH DEPOSIT BEING MADE 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 MA Y BE SPECIFIED IN, AND UTILISED IN ACCORDANCE WITH, ANY SCHEME WHICH T HE CENTRAL GOVERNMENT MAY, BY NOTIFICATION IN THE OFFICIAL GAZ ETTE, FRAME IN THIS BEHALF AND SUCH RETURN 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 PURCHASE O R CONSTRUCTION OF THE NEW ASSET TOGETHER WITH THE AMOUNT SO DEPOSITED SHALL BE 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 CONST RUCTION OF THE NEW ASSET WITHIN THE PERIOD SPECIFIED IN SUB-SECTION (1 ), THEN, (I) THE AMOUNT BY WHICH (A) THE AMOUNT OF CAPITAL GAIN ARISING FROM THE TRANSFER OF THE ORIGINAL ASSET NOT CHARGED UNDER SECTION 45 ON THE BASIS OF THE COST OF THE NEW ASSE T AS PROVIDED IN CLAUSE (A) OR, AS THE CASE MAY BE, CLAUSE (B) OF SUB-SECTION (1), EXCEEDS ITA NO.2208/AHD/16 [SMT. HANSABEN P. PATEL VS. ITO] A.Y. 2013-14 - 6 - (B) THE AMOUNT THAT WOULD NOT HAVE BEEN SO CHARGED HAD THE AMOUNT ACTUALLY UTILISED BY THE ASSESSEE FOR THE PURCHASE OR CONSTRUCTION OF THE NEW ASSET WITHIN THE PERIOD SPECIFIED IN SUB-SECTION (1) BEEN THE COST OF THE NEW ASSET, SHALL BE CHARGED UNDER SECTION 45 AS INCOME OF THE PREVIOUS YEAR IN WHICH THE PERIOD OF THREE YEARS FR OM THE DATE OF THE TRANSFER OF THE ORIGINAL ASSET EXPIRES; AND (II) THE ASSESSEE SHALL BE ENTITLED TO WITHDRAW THE UNUTILISED AMOUNT IN ACCORDANCE WITH THE SCHEME AFORESAID. [UNDERLINE IS OURS] 9.2 FROM A PLAIN READING, WE NOTICE THAT SECTION 54 F(4) OF THE ACT ENJOINS THAT THE NET CONSIDERATION RECEIVED ON SALE OF ORIGINAL ASSET IS REQUIRED TO BE APPROPRIATED BY THE ASSESSEE TOWARDS PURCHASE OF NEW ASSETS BEFORE FURNISHING OF RETURN OF INCOME UNDER S. 139 OF THE ACT. ALTERNATIVELY, IN THE EVENT OF NON-UTILIZATION OF NET CONSIDERATION TOWARDS PURCHASE OF NEW ASSET, THE ASSESSEE IS REQU IRED TO DEPOSIT THE CAPITAL GAINS IN SPECIFIED BANK ACCOUNT BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME UNDER S.139(1) OF THE ACT. IN THE INSTANT CASE, THE ASSESSEE HAS NOT CLAIMED ANY PURCHASE OF NEW ASSET. WE ARE THUS ONLY CONCERNED WITH DEPOSIT OF THE NET CONSIDERATION IN THE DESIGNATED CAPITAL GAIN ACCOUNT SCHEME. THUS, THE CLAIM OF TH E ASSESSEE IS REQUIRED TO BE WEIGHED ON THE FIRST LIMB OF SECTION 54F(4) OF THE ACT I.E. WHETHER SALE CONSIDERATION HAS BEEN UTILIZED F OR DEPOSIT IN THE DESIGNATED SCHEME BEFORE THE DATE OF FILING OF RETU RN OF INCOME. AT THIS JUNCTURE, WE STRAIGHTWAY NOTICE THAT THE LEGIS LATURE IN ITS OWN WISDOM HAS USED THE EXPRESSION; SECTION 139 OF THE ACT WITH REFERENCE TO SECOND LIMB I.E. PURCHASE ETC. OF NEW ASSET, WHI LE ON THE OTHER HAND, THE TIME LIMIT WAS UNDER S.139(1) OF THE ACT HAS BE EN SPECIFIED FOR DEPOSIT IN CAPITAL GAIN ACCOUNT SCHEME. THUS, WHEN VIEWED, THE DISTINCTION BETWEEN THE TWO DIFFERENT FORMS OF EXPR ESSION OF TIME LIMIT CAN YIELD DIFFERENT RESULTS. WHILE SECTION 139 USE D WITH REFERENCE TO ITA NO.2208/AHD/16 [SMT. HANSABEN P. PATEL VS. ITO] A.Y. 2013-14 - 7 - PURCHASE OF NEW ASSET IS POSSIBLY OPEN TO VARIED IN TERPRETATION I.E. TIME LIMIT UNDER S. 139(1) OF THE ACT AS WELL AS EX TENDED TIME UNDER S.139(4) OF THE ACT, THE TIME LIMIT PROVIDED FOR DE POSIT IN SCHEME, ON THE OTHER HAND, HAS BEEN CATEGORICALLY PROVIDED TO BE AS PER SECTION 139(1) OF THE ACT WITHOUT ANY AMBIGUITY. THERE IS PRESUMPTION THAT WORDS ARE USED IN AN ACT OF PARLIAMENT, CORRECTLY A ND EXACTLY, AND NOT LOOSELY AND INEXACTLY. IN THE PRESENT CASE, WE ARE CONCERNED WITH UTILIZATION OF NET CONSIDERATION ARISING ON SALE OF ORIGINAL ASSETS TOWARDS DEPOSIT IN CAPITAL GAIN ACCOUNT SCHEME. TH E TIME STIPULATED FOR SUCH DEPOSIT IS QUA SECTION 139(1) OF THE ACT. HENCE, THE SUGGESTION ON BEHALF OF THE ASSESSEE FOR ELIGIBILIT Y OF DEPOSITS SUBSEQUENT TO EXPIRY OF TIME LIMIT UNDER S.139(1) O F THE ACT [EXPRESSLY PROVIDED IN THE ACT] IS NOT ALIGNED WITH AND MILITA TES AGAINST THE PLAIN PROVISIONS OF LAW CODIFIED IN SECTION 54F(4) OF THE ACT. 9.3 THE MANDATE OF SECTION 54F(4) OF THE ACT BEING CRYSTAL CLEAR, IT IS QUITE DIFFICULT TO DEPART THEREFROM. WHILE HOLD ING SO, WE ALSO REFER TO THE DECISION OF THE HONBLE SUPREME COURT RENDE RED IN THE CASE OF DILIPKUMAR & CO. [2018] 9 SCC 1 REQUIRING STRICT CO NSTRUCTION OF BENEFICIAL PROVISION. IN THE ABSENCE OF ANY AMBIGU ITY IN THE EXEMPTION PROVISION FOR ELIGIBILITY, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(A) WHERE THE NE T CONSIDERATION HAS NOT BEEN UTILIZED FOR THE PURPOSES OF DEPOSIT IN TH E NOTIFIED BANK ACCOUNT IN TERMS OF SECTION 54F(4) OF THE ACT BEFOR E DUE DATE SPECIFIED UNDER S.139(1) OF THE ACT. 9.4 WE NOW TURN TO DECISIONS REFERRED TO ON BEHALF OF THE ASSESSEE. THESE DECISIONS WERE RENDERED IN THE CONTEXT OF THE IR OWN FACTS. IN BOTH CASES, THE CONSIDERATION WAS INVESTED FOR PURC HASE OF RESIDENTIAL HOUSE WITHIN STIPULATED PERIOD. IN THE INSTANT CAS E, THE ISSUE IS WITH REFERENCE TO DEPOSIT IN SCHEME. COUPLED WITH THIS, THE BENEFIT OF LAW ITA NO.2208/AHD/16 [SMT. HANSABEN P. PATEL VS. ITO] A.Y. 2013-14 - 8 - ON INTERPRETATION OF BENEFICIAL PROVISION BY HONBL E SUPREME COURT IN DILIPKUMAR & CO. (SUPRA) WAS NOT AVAILABLE IN THOSE CASES. THUS, WE ARE NOT PERSUADED BY THE DECISIONS CITED. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMIS SED. SD/- SD/- (MADHUMITA ROY) (PRADIP KUMA R KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 08/02/2019 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 08/02/201 9