Sri Dharamchand Bafna , Bangalore V. The Income Tax Officer Ward-2(2)(1), Bangalore

ITA 260/BANG/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0111 (ITAT-BANGALORE)
• Duration Of Justice: 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 04-12-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 14-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R PREMI J T ITA T BENGA LURU
• Keywords: Sale consideration of property below Jantri Value; Capital asset
• Section: 50C; 54F; 139(1); 13; 54; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI D.S. SUNDER SINGH , ACCOUNTANT MEMBER IT A NO. 260/BANG/2019 ASSESSMENT YEAR: 2013 - 14 SHRI DHARAMCHAND BAFNA, NO.14, 3 RD CROSS, N.S. IYENGAR STREET, KUMARA PARK WEST, BENGALURU 560 020. PAN: ABUPB 5851B VS. THE INCOME TAX OFFICER, WARD 2(2)(1), BANGALORE 560 001. APPELLANT RESPONDENT APPELLANT BY : SMT. SUMAN LUNKAR, CA RESPONDENT BY : S MT. R. PREMI, JT. CIT(DR)(ITA T) BENGALURU. DATE OF HEARING : 0 4 .12 .2019 DATE OF PRONOUNCEMENT : 30 .1 2 .2019 O R D E R PER N.V. VASUDEVAN, VICE PRESIDENT THE ABOVE APPEAL BY THE ASSESSEE IS AGAINST THE O RDER DATED 31.12.2018 RELATING TO ASSESSMENT YEAR 2013-14. 2. THE ONLY ISSUE THAT ARISES FOR CONSIDERATION IN THIS APPEAL IS AS TO WHETHER THE REVENUE AUTHORITIES WERE JUSTIFIED IN D ENYING THE BENEFIT OF DEDUCTION TO THE ASSESSEE U/S. 54 OF THE INCOME-TAX ACT, 1961 [THE ACT]. ITA NO.260/BANG/2019 PAGE 2 OF 9 3. THE ADMITTED FACTS ARE THAT THE ASSESSEE IS AN I NDIVIDUAL. HE SOLD THE RESIDENTIAL PROPERTY DURING THE PREVIOUS YEAR F OR A SALE CONSIDERATION OF RS.1,02,00,000 AND THE GUIDELINE VALUE ADOPTED FOR THE PURPOSE OF STAMP DUTY AND REGISTRATION BY THE SUB-REGISTRAR WAS A SU M OF RS.1,08,00,000. IN THE COMPUTATION OF LONG TERM CAPITAL GAIN ON SALE O F THE AFORESAID PROPERTY, THE ASSESSEE HAD ADOPTED SALE CONSIDERATION OF RS.1 ,11,00,000. THE CLAIM OF EXEMPTION ON THE LONG TERM CAPITAL GAIN ON SALE OF RESIDENTIAL PROPERTY WAS RS.82,96,920. THE ASSESSEE HAD SOLD T HE RESIDENTIAL HOUSE PROPERTY ON 7.2.2013. THE ASSESSEE PURCHASED A SIT E FOR PUTTING UP A RESIDENTIAL HOUSE ON 30.3.2013 FOR A CONSIDERATION OF RS.1.15 CRORES. IN THE RETURN OF INCOME FILED FOR THE RELEVANT ASSESSMENT YEAR, THE ASSESSEE CLAIMED EXEMPTION U/S. 54 IN RESPECT OF THE INVESTM ENT MADE IN THE PURCHASE OF SITE ON 30.3.2013. 4. THE ASSESSEE COULD NOT PUT UP RESIDENTIAL HOUSE OVER THE SITE PURCHASED BY HIM. THE ASSESSEE, HOWEVER, PURCHASED UNDER A SALE DEED DATED 31.10.2014 ANOTHER RESIDENTIAL HOUSE FOR A SU M OF RS.96,11,000. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE CLAIMED DEDUCTION U/S. 54 OF THE ACT FOR PURCHASE OF RESIDENTIAL HOUS E UNDER THE SALE DEED DATED 31.10.2014. THE CONDITIONS TO BE SATISFIED F OR ALLOWING DEDUCTION U/S. 54 OF THE ACT ARE THAT THE AMOUNT OF CAPITAL GAIN H AS TO BE INVESTED IN PURCHASE OF A RESIDENTIAL HOUSE WITHIN TWO YEARS FR OM THE DATE OF TRANSFER. THE DATE OF TRANSFER IN THE PRESENT CASE WAS 7.2.20 13 AND IN TERMS OF SECTION 54(1) OF THE ACT, THE PURCHASE OF ONE RESID ENTIAL HOUSE IN INDIA HAS TO BE MADE ON OR BEFORE 6.2.2015. IT WAS THE PLEA OF THE ASSESSEE THAT THE NEW RESIDENTIAL HOUSE WAS PURCHASED ON 31.10.2014. THE REQUIREMENTS OF CLAIM OF DEDUCTION U/S. 54(1) HAVE BEEN COMPLIED WI TH BY THE ASSESSEE. U/S. 54(2) OF THE ACT, IF THE ASSESSEE DOES NOT UTI LIZE THE CAPITAL GAIN IN PURCHASE OF A NEW ASSET BEFORE THE DATE OF FURNISHI NG THE RETURN OF INCOME U/S. 139 OF THE ACT, HE HAS TO DEPOSIT THE CAPITAL GAIN IN A SPECIFIED BANK ITA NO.260/BANG/2019 PAGE 3 OF 9 ACCOUNT WITHIN THE DUE DATE FOR FILING THE RETURN O F INCOME U/S. 139(1) OF THE ACT FOR THE RELEVANT ASSESSMENT YEAR. ADMITTEDLY, THE ASSESSEE HAD NOT MADE DEPOSIT OF CAPITAL GAIN IN THE SPECIFIED BANK ACCOUNT AS REQUIRED U/S. 54(2) OF THE ACT. SEC.54 OF THE 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 FAMILY, THE CAPITAL GAIN ARISES FROM THE TRANSFER O F A LONG-TERM CAPITAL ASSET, BEING BUILDINGS OR LANDS APPURTENANT THERETO, AND BEING A RESIDENTIAL HOUSE, THE INCOME OF WHICH IS C HARGEABLE UNDER THE HEAD 'INCOME FROM HOUSE PROPERTY' (HEREAF TER IN THIS SECTION REFERRED TO AS THE ORIGINAL ASSET), AND THE ASSESSEE HAS WITHIN A PERIOD OF ONE YEAR BEFORE OR TWO YEARS AFT ER THE DATE ON WHICH THE TRANSFER TOOK PLACE PURCHASED, OR HAS WITHIN A PERIOD OF THREE YEARS AFTER THAT DATE CONSTRUCTED, A RESIDENTIAL HOUSE, THEN, INSTEAD OF THE CAPITAL GAIN BEING CHAR GED TO INCOME-TAX AS INCOME OF THE PREVIOUS 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 (HER EAFTER IN THIS SECTION REFERRED TO AS THE NEW ASSET), THE DIFFEREN CE 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 PREVI OUS 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 OR CONSTRUCTION, AS THE CASE MAY BE , 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 B E CHARGED UNDER SECTION 45; AND FOR THE PURPOSE OF COMPUTING IN RESPECT OF THE NEW ASSET ANY CAPITAL GAIN ARISING FROM ITS TRA NSFER WITHIN A PERIOD OF THREE YEARS OF ITS PURCHASE OR CONSTRUCTI ON, AS THE CASE MAY BE, THE COST SHALL BE REDUCED BY THE AMOUNT OF THE CAPITAL GAIN. ITA NO.260/BANG/2019 PAGE 4 OF 9 (2) THE AMOUNT OF THE CAPITAL GAIN WHICH IS NOT APP ROPRIATED BY THE ASSESSEE TOWARDS THE PURCHASE OF THE NEW ASSET 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 TH E DATE OF FURNISHING 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 ASSESSEE FOR FURNISHING THE RETU RN 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 GOVER NMENT MAY, BY NOTIFICATION IN THE OFFICIAL GAZETTE, FRAME IN THIS BEHALF AND SUCH RETURN SHALL BE ACCOMPANIED BY PROOF OF SU CH DEPOSIT; AND, FOR THE PURPOSES OF SUB-SECTION (1), THE AMOUN T, IF ANY, ALREADY UTILISED BY THE ASSESSEE FOR THE PURCHASE O R CONSTRUCTION OF THE NEW ASSET TOGETHER WITH THE AMOUNT SO DEPOSI TED 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 C ONSTRUCTION OF THE NEW ASSET WITHIN THE PERIOD SPECIFIED IN SUB-SE CTION (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 YEARS 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. 5. IT WAS THE PLEA OF ASSESSEE THAT WHEN THE CAPITA L GAIN IS UTILIZED IN PURCHASING THE NEW ASSET WITHIN A PERIOD OF TWO YEA RS FROM THE DATE OF TRANSFER, THERE WAS NO REQUIREMENT OF DEPOSIT OF CA PITAL GAIN IN THE SPECIFIED BANK ACCOUNT. IN THIS REGARD, THE ASSESSEE HAS PLA CED ON THE DECISION OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF FATHIMA BAI V. ITO, 32 DTR 233 (KAR) WHEREIN IT WAS HELD THAT WHEN THE CAPITAL GAIN IS INVESTED IN PURCHASE OF NEW ASSET WITHIN A PERIOD OF TWO YEARS FROM THE DATE OF ITA NO.260/BANG/2019 PAGE 5 OF 9 TRANSFER, THERE WAS NO REQUIREMENT TO DEPOSIT CAPIT AL GAIN IN SPECIFIED BANK ACCOUNT AND ON THAT GROUND DEDUCTION U/S. 54 CANNOT BE DENIED TO THE ASSESSEE. THE AO, HOWEVER, REJECTED THE PLEA OF TH E ASSESSEE FOR DEDUCTION FOR THE REASON THAT ASSESSEE FAILED TO CO MPLY WITH THE REQUIREMENTS OF SECTION 54(2) OF THE ACT. 6. ON APPEAL BY THE ASSESSEE, THE CIT(APPEALS) CONF IRMED THE ACTION OF THE AO WITH THE FOLLOWING RELEVANT OBSERVATIONS: - 5. I HAVE CONSIDERED THE ABOVE GROUNDS OF APPEAL, STATEMENT OF FACTS AND WRITTEN SUBMISSIONS FILED BY THE APPEL LANT AND ALSO PERUSED THE ASSESSMENT ORDER. DURING THE APPELLATE PROCEEDINGS THE APPELLANT HAS SUBMITTED THAT THE ISSUE IS COVER ED BY THE JUDGMENTS OF VARIOUS JUDICIAL AUTHORITIES AND I HAV E TAKEN A LOOK ON THE FACTS OF THE APPELLANT'S CASE AND EXAMINED A S TO WHETHER THE FACTS OF THOSE CASES ARE SQUARELY APPLICABLE T O THE FACTS OF THE APPELLANTS CASE OR NOT. THE ASSESSING OFFICER HAS N OTICED VIDE THE AO'S ORDER IN PARA NO 4.4 THAT THE ASSESSEE IN HIS SUBMISSION HAS NOW STATED HE HAS PURCHASED A RESIDENTIAL. PROPERTY JOINTLY WITH HIS WIFE VIDE SALE DEED DATED 31.10.2014 WHEREIN HI S SHARE OF INVESTMENT WAS RS. 96,11,000/-. IT IS SEEN FROM THE SALE DEED FURNISHED THAT THE TOTAL SALE CONSIDERATION OF THE PROPERTY IS RS. 1,80,00,000/-. THE ASSESSEE HAS FURTHER STATED THAT HE HAS SATISFIED THE CONDITIONS U/S 54(1) I.E., PURCHASE OF RESIDENT IAL PROPERTY WITHIN TWO YEARS FROM THE DATE OF SALE OF THE ORIGI NAL ASSETS. THE ASSESSEE HAS RELIED UPON THE FOLLOWING DECISIONS AS MENTIONED IN THE LETTER FILED: 5.1 AS PER INCOME TAX ACT 1961, THE ASSESSEE HAS TO INTER ALIA SATISFY THE FOLLOWING CONDITIONS FAR CLAIMING EXEMP TION U/S 54: 1. THE ASSESSEE HAS WITHIN A PERIOD OF ONE YEAR BE FORE OR TWO YEARS AFTER THE DATE ON WHICH THE TRANSFER TOOK PLACE PURCHASED OR HAS WITHIN A PERIOD OF THREE YEARS AFT ER THAT DATE CONSTRUCTED A RESIDENTIAL HOUSE. 2. IF THE AMOUNT OF CAPITAL GAIN IS NOT APPROPRIAT ED BY THE ASSESSEE TOWARDS PURCHASE OF THE NEW ASSETS MADE WI THIN ONE YEAR BEFORE THE DATE ON WHICH THE TRANSFER OF THE O RIGINAL ASSET ITA NO.260/BANG/2019 PAGE 6 OF 9 TOOK PLACE, OR WHICH IS NOT UTILIZED FOR THE PURCHA SE OR CONSTRUCTION OF THE NEW ASSET BEFORE THE DATE OF FU RNISHING THE RETURN OF INCOME UNDER SECTION 139, SHALL BE DEPOSI TED FURNISHING SUCH RETURN (SUCH DEPOSIT BEING MADE IN ANY CASE NO T LATER THAN THE DUE APPLICABLE IN THE CASE OF THE ASSESSEE FOR FURNISHING THE RETURN OF INCOME UNDER SUB-SECTION(L) OF SECTION 13 9 IN AN ACCOUNT IN ANY SUCH BANK OR INSTITUTION AS MAY SPEC IFIED IN, AND UTILIZED IN ACCORDANCE WITH ANY SCHEME WHICH THE CE NTRAL GOVERNMENT MAY, BY NOTIFICATION IN THE OFFICIAL GAZ ETTE FRAME IN THIS BEHALF AND SUCH RETURN SHALL BE ACCOMPANIED BY PROOF OF SUCH DEPOSIT... .... . 5.2 AS PER SECTION 54(2) IF THE NEW ASSET HAS NOT BEEN ACQUIRED BEFORE FILING THE RETURN OF INCOME U/S 39, THE CAPI TAL GAIN AMOUNT WHICH IS NOT UTILIZED IS TO BE DEPOSITED IN THE CAP ITAL GAIN ACCOUNT BY THE ASSESSEE BEFORE FURNISHING THE RETURN OF THE INCOME (SUCH DEPOSIT BEING MADE IN ANY CASE NOT LETTER THAN THE DUE DATE APPLICABLE IN THE CASE OF THE ASSESSEE FOR FURNISHI NG THE RETURN OF INCOME UNDER SUB-SECTION (1) OF SECTION 139). AFTER FULFILLING THIS CONDITION THE ASSESSEE IS ELIGIBLE TO PURCHASE NEW PROPERTY WITHIN TWO YEARS OF THE DATE OF TRANSFER OF ASSET. IN THE INSTANT CASE THE ASSESSEE HAS NOT DEPOSITED ANY AMOUNT IN THE CAPITA L GAIN ACCOUNT. THE ASSESSEE'S CLAIM (THE CLAIM FOR EXEMPT ION U/S. 54 IN THE RETURN OF INCOME FILED IS TOWARDS SITE PURCHASE D) OF EXEMPTION U/S 54 ON THE PROPERTY PURCHASED JOINTLY VIDE SALE DEED DATED 31.10.2014, THOUGH HIS SUBMISSION DATED 03/03 /2016, IS NOT ACCEPTABLE. 5.3 THE FACTS OF THE CASE LAW RELIED UPON BY THE A SSESSEE IS TOTALLY DIFFERENT FROM THE FACTS OF THE INSTANT CAS E AND HENCE THE RATIO OF THE DECISIONS RELIED UPON BY HON'BLE COURT S IS NOT APPLICABLE IN THIS CASE. 6. IN VIEW OF THE DISCUSSIONS MADE IN THE ABOVE P ARAS, THE ASSESSEE HAS VERY CLEARLY NOT FULFILLED THE CONDITI ONS MENTIONED IN SECTION 54 FOR CLAIMING EXEMPTION. THE ASSESSEE HAS NOT PUT UP ANY CONSTRUCTION ON THE SITES PURCHASED AFTER TRANS FER OF ORIGINAL PROPERTY AND THE TIME LIMIT FOR COMPLETION OF CONST RUCTION HAS EXPIRED ON 07/02/2016. HENCE, THE EXEMPTION U/S 54 OF THE IT ACT WHICH WAS CLAIMED BY THE ASSESSEE IN THE RETURN OF INCOME FILED BY HIM FOR THE ASSESSMENT YEAR 2013-14 WAS DISALLOW ED BY THE ASSESSING OFFICER. I DO NOT FIND ANY INFIRMITY IN THE IMPUGNED ITA NO.260/BANG/2019 PAGE 7 OF 9 ORDER PASSED BY THE ASSESSING OFFICER TO INTERFERE AND THEREFORE IN THE LIGHT OF THE FACTS OF THE CASE I HEREBY UPHOLD THE ADDITION MADE BY THE ASSESSING OFFICER. THE GROUNDS ARE DIS MISSED. 7. AGGRIEVED BY THE ORDER OF THE CIT(APPEALS), THE ASSESSEE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS. THE LD. CO UNSEL FOR THE ASSESSEE REITERATED THE STAND OF ASSESSEE AS TAKEN BEFORE THE REVENUE AUTHORITIES. THE LD. DR RELIED ON THE ORDER OF AO/ CIT(A). 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE T WO GROUNDS ON WHICH DEDUCTION U/S. 54 OF THE ACT WAS DENIED BY TH E REVENUE AUTHORITIES WAS (A) NON-COMPLIANCE OF THE PROVISIONS OF SECTION 54(2) OF THE ACT I.E., NOT DEPOSITING THE UNUTILIZED CAPITAL GAIN IN A DESIGNA TED BANK ACCOUNT WITHIN THE DUE DATE PRESCRIBED U/S.139 OF THE ACT AND (B) THE ASSESSEE PURCHASED LAND BY UTILIZING THE CAPITAL GAIN BUT DID NOT PUT UP CONSTRUCTION OF RESIDENTIAL HOUSE ON THE SAID LAND BUT CLAIMED DEDU CTION U/S.54 OF THE ACT IN RESPECT OF PURCHASE OF RESIDENTIAL HOUSE. AS FA R AS THE SECOND GROUND ON WHICH DEDUCTION U/S.54 OF THE ACT WAS DENIED TO THE ASSESSEE, VIZ., THE GROUND THAT THE ASSESSEE PURCHASED A LAND WITH A VI EW TO PUT UP CONSTRUCTION ON THE SAME BUT DID NOT DO SO INSTEAD PURCHASED A RESIDENTIAL HOUSE PROPERTY, WE ARE OF THE VIEW THAT THE PROVISI ONS OF SEC.54(1) GIVE TWO OPTIONS, VIZ., (I) PURCHASE OF A RESIDENTIAL HOUSE OR (II) PUTTING UP OF CONSTRUCTION IN THE FORM OF A RESIDENTIAL HOUSE. T HERE IS NO PROHIBITION IN LAW FOR THE ASSESSEE TO OPT FOR EITHER OF THE MODE FOR CLAIMING DEDUCTION. THE FACT THAT INITIALLY ASSESSEE PURCHASED A SITE W ITH A VIEW TO PUT UP CONSTRUCTION OVER THE SAME BUT LATER CHANGED HIS MI ND AND INSTEAD PURCHASED A RESIDENTIAL HOUSE, CANNOT DEBAR THE ASS ESSEE FROM CLAIMING THE BENEFIT OF DEDUCTION U/S.54 OF THE ACT, SO LONG AS THE OTHER CONDITIONS OF SEC.54 OF THE ACT ARE SATISFIED. ITA NO.260/BANG/2019 PAGE 8 OF 9 6. AS FAR AS THE FIRST GROUND ON WHICH DEDUCTION U/ S.54 OF THE ACT WAS DENIED TO THE ASSESSEE VIZ., NON-COMPLIANCE OF THE PROVISIONS OF SECTION 54(2) OF THE ACT I.E., NOT DEPOSITING THE UNUTILIZE D CAPITAL GAIN IN A DESIGNATED BANK ACCOUNT WITHIN THE DUE DATE PRESCRI BED U/S.139 OF THE ACT, IT IS NOT DISPUTED THAT THE ASSESSEE DID NOT DEPOSI T THE UNUTILIZED LONG TERM CAPITAL GAIN IN THE DESIGNATED BANK ACCOUNT AS PER SECTION 54(2) OF THE ACT. NEVERTHELESS, HE HAS COMPLETED THE PURCHASE OF A NE W ASSET WITHIN A PERIOD OF TWO YEARS FROM THE DATE OF TRANSFER. IN SUCH CIRCUMSTANCES, COURTS HAVE TAKEN A VIEW THAT THERE IS NO REQUIREMENT TO S ATISFY THE CONDITION U/.S 54(2) OF THE ACT. IN THIS REGARD THE LEARNED COUNS EL FOR THE ASSESSEE HAS RELIED ON THE DECISION OF THE HONBLE KARNATAKA HIG H COURT IN THE CASE OF PR.CIT VS. R.SRINIVAS ITA NO.384/2015 JUDGMENT DATE D 2.11.2015 WHEREIN THE HONBLE KARNATAKA HIGH COURT FOLLOWING THE DECI SION IN THE CASE OF FATHIMA BAI VS. ITO (2009) 32 DT 243 (KARN.) HELD THAT IF THE CAPITAL GAIN IS UTILIZED IN PURCHASE OF NEW ASSET WITHIN THE TIME P ERMITTED BY SEC.54(1) OF THE ACT THEN THERE IS NO NECESSITY TO MAKE DEPOSIT OF THE UNUTILIZED CAPITAL GAIN IN A DESIGNATED ACCOUNT. THE DECISION IN THE CASE OF CIT V. K. RAMACHANDRA RAO IN ITA NO.47/2014 DATED 14.7.2014 OF THE HON'BLE 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 C APITAL GAIN IN SPECIFIED BANK ACCOUNT. 10. IN VIEW OF THE AFORESAID DECISIONS OF THE HON'B LE KARNATAKA HIGH COURT, WE ARE OF THE VIEW THAT THE ASSESSEE IS ENTI TLED TO DEDUCTION U/S. 54 ITA NO.260/BANG/2019 PAGE 9 OF 9 OF THE ACT. IN VIEW OF THE ABOVE CONCLUSION, THERE MAY NOT BE ANY LONG TERM CAPITAL GAIN THAT REMAINS FOR TAXATION AND THEREFOR E THE PLEA OF THE ASSESSEE QUESTIONING THE PERIOD FOR WHICH THE ASSESSEE SHOUL D BE GIVEN THE BENEFIT OF INDEXATION WHILE COMPUTING THE LONG TERM CAPITAL GAIN AND THE QUESTION WHETHER THE VALUATION U/S. 50C SHOULD BE ADOPTED BY CALCULATING THE LONG TERM CAPITAL GAIN ARE ACADEMIC AND DO NOT CALL FOR ANY ADJUDICATION. 11. IN THE RESULT, THE APPEAL BY THE ASSESSEE IS AL LOWED. PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF DECEMBER, 2019. SD/- SD/- ( D S SUNDER SINGH ) ( N V VASUDEVAN ) ACCOUNTANT MEMBER VICE PRES IDENT BANGALORE, DATED, THE 30 TH DECEMBER, 2019. / DESAI S MURTHY / COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FIL E BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.