ITO WARD - 1(3), THANE, THANE V. KALPANA PRADEEP AMBRE, THANE

ITA 5156/MUM/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7041 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 12-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SOBODH RATNAPARAKHI
• Keywords: Capital asset; Question of law; Benefit of exemption
• Section: 54F; 54; 139

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H, MUMBAI , . , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ITA NO.5156/MUM/2016 ASSESSMENT YEAR: 2012-13 INCOME TAX OFFICER, WARD-1(3), ROOM NO.10, 6 TH FLOOR, ASHAR IT PARK, B-WING, WAGLE INDL. ESTATE, THANE(W)-400604 / VS. SMT. KALPANA PRADEEP AMBRE, 1801, PRISTINE VASANT LAWNS, POKHRAN ROAD NO.2, MAJIWADA, THANE(W) ( / REVENUE) ( !'# $ /ASSESSEE) P.A. NO.AAFPC0868D / REVENUE BY SHRI RAM TIWARI-DR !'# $ / ASSESSEE BY SHRI SOBODH RATNAPARAKHI % & ' $ ( / DATE OF HEARING : 04/06/2018 ' $ ( / DATE OF PRONOUNCEMENT 04/06/2018 ITA NO.5156/MUM/2016 SMT. KALPANA PRADEEP AMBRE 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 30/05/2016 OF THE LD. FIRST APPELLATE AUTHORI TY, THANE, IN PARTLY ALLOWING THE CLAIMED DEDUCTION UND ER SECTION 54F OF THE INCOME TAX ACT, 1961 (HEREINAFTE R THE ACT) IGNORING THE DATE OF FILING OF RETURN AS PER S ECTION 139(4) INSTEAD OF 139(1) OF THE ACT FOR THE PURPOSE S OF DEPOSITING THE CAPITAL GAINS IN THE LONG TERM CAPIT AL GAINS SCHEME IGNORING THE PROVISION OF SECTION 54F(4) OF THE ACT. 2. DURING HEARING, SHRI RAM TIWARI, LD. DR, ADVANCED ARGUMENTS, WHICH IS IDENTICAL TO THE GROUN D RAISED BY EXPLAINING THAT THE ASSESSEE PURCHASED TH E GALA ON 01/10/2011 AND SOLD THE SAME IN JANUARY, 2013. T HUS, THE CLAIMED UNDER SECTION 54F WAS WRONGLY MADE. REL IANCE WAS PLACED UPON THE DECISION FROM HON'BLE JURISDICT IONAL HIGH COURT IN HUMAYUN SULEMAN MERCHANT VS CCIT (ITA NO.545 OF 2002), ORDER DATED 18/08/2016. ON THE OTH ER HAND, THE LD. COUNSEL FOR THE ASSESSEE, SHRI SUBODH RATNAPARKHI, ALSO RELIED UPON THE SAME DECISION BY INVITING ITA NO.5156/MUM/2016 SMT. KALPANA PRADEEP AMBRE 3 OUR ATTENTION TO PARA (W) OF THE ORDER. THE IMPUGNE D ORDER WAS DEFENDED. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF ARE THAT THE ASSESSEE IS AN INDIVIDUAL SOLD INDUSTR IAL GALA NO.204 AT PARVATI INDUSTIRAL ESTATE, LOWER PAREL, M UMBAI, UNDER AGREEMENT DATED 01/10/2011 FOR A CONSIDERATIO N OF RS.81 LAKHS. AFTER DEDUCTING THE INDEXED COST OF AC QUISITION AMOUNTING TO RS.24,06,671/- CLAIMED CAPITAL GAIN O F RS.56,93,329/-. THE ASSESSEE PURCHASED A RESIDENTIA L HOUSE VIDE AGREEMENT DATED 16/01/2013, BEARING NUMB ER G-2404, VIVANT, THANE, FOR A CONSIDERATION OF RS.77,92,875/-. THE ASSESSEE CLAIMED EXEMPTION TO T HE EXTENT OF RS.56,93,329/- UNDER SECTION 54F OF THE A CT AND DECLARED NIL CAPITAL GAINS. THE ASSESSEE MADE THE INVESTMENT IN PURCHASE OF NEW FLAT WITHIN THE EXTEN DED TIME GRANTED BY SECTION 139(4) OF THE ACT. THE LD. ASSESSING OFFICER DECLINED THE CLAIM OF THE ASSESSEE FOR THE REASON THAT THE ASSESSEE DID NOT INVEST THE CAPITAL GAINS IN THE CAPITAL GAINS ACCOUNT SCHEME BEFORE THE EXPIRY OF T IME ITA NO.5156/MUM/2016 SMT. KALPANA PRADEEP AMBRE 4 PROVIDED UNDER SECTION 139(1) AND DISALLOWED THE EXEMPTION CLAIMED UNDER SECTION 54F OF THE ACT RESU LTED INTO ADDITION OF RS.56,93,329/- TO THE RETURNED INC OME. 2.2. ON APPEAL BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEAL), THE FACTUAL MATRIX WAS CONSIDE RED AND CONSIDERING THE DECISION OF THE TRIBUNAL IN THE CAS E OF KISHORE H. GALAIYA AND FURTHER THE DECISION FROM HO N'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS J AGRATI AGGARWAL (2011) 339 ITR 610 ALONG WITH OTHER CASES AND HELD THAT THE ASSESSEE INVESTED THE AMOUNT OF RS.52,38,125/- FOR PURCHASING THE NEW ASSET, THEREF ORE, TO THIS EXTENT, EXTENDED THE BENEFIT TO THE ASSESSEE A ND RESTRICTED THE DISALLOWANCE TO RS.4,55,204/-. THE R EVENUE IS AGGRIEVED AND IS IN APPEAL BEFORE THIS TRIBUNAL. WITH THIS FACTUAL MATRIX, NOW WE SHALL ANALYZE THE SECTION 54 F OF THE ACT, WHICH IS REPRODUCED HEREUNDER:- CAPITAL GAIN ON TRANSFER OF CERTAIN CAPITAL ASSET S NOT TO BE CHARGED IN CASE OF INVESTMENT IN RESIDENTIAL HOUSE. 54F. (1) SUBJECT TO THE PROVISIONS OF SUB-SECTION ( 4), WHERE, IN THE CASE OF AN ASSESSEE BEING AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY, THE CAPITAL GAIN ARISES FROM THE TRANSFER OF ANY LO NG-TERM CAPITAL ASSET, NOT BEING A RESIDENTIAL HOUSE (HEREAFTER IN THIS SECTION REFERRED TO AS THE ORIGINAL ASSET), AND THE ASSESSEE HAS, WI THIN A PERIOD OF ONE YEAR BEFORE OR TWO YEARS AFTER THE DATE ON WHICH TH E TRANSFER TOOK PLACE PURCHASED, OR HAS WITHIN A PERIOD OF THREE YE ARS AFTER THAT DATE ITA NO.5156/MUM/2016 SMT. KALPANA PRADEEP AMBRE 5 CONSTRUCTED, ONE RESIDENTIAL HOUSE IN INDIA (HEREAF TER IN THIS SECTION REFERRED TO AS THE NEW ASSET), THE CAPITAL GAIN SHA LL BE DEALT WITH IN ACCORDANCE WITH THE FOLLOWING PROVISIONS OF THIS SE CTION, THAT IS TO SAY, (A) IF THE COST OF THE NEW ASSET IS NOT LESS THAN THE NET CONSIDERATION IN RESPECT OF THE ORIGINAL ASSET, THE WHOLE OF SUCH CAPITAL GAIN SHALL NOT BE CHARGED UNDER SECTION 45 ; (B) IF THE COST OF THE NEW ASSET IS LESS THAN THE NET CONSIDERATION IN RESPECT OF THE ORIGINAL ASSET, SO MUCH OF THE CAPIT AL GAIN AS BEARS TO THE WHOLE OF THE CAPITAL GAIN THE SAME PRO PORTION AS THE COST OF THE NEW ASSET BEARS TO THE NET CONSIDERATIO N, SHALL NOT BE CHARGED UNDER SECTION 45 : PROVIDED THAT NOTHING CONTAINED IN THIS SUB-SECTION SHALL APPLY WHERE (A) THE ASSESSEE, (I) OWNS MORE THAN ONE RESIDENTIAL HOUSE, OTHER T HAN THE NEW ASSET, ON THE DATE OF TRANSFER OF THE ORIGINAL ASSE T; OR (II) PURCHASES ANY RESIDENTIAL HOUSE, OTHER THAN THE NEW ASSET, WITHIN A PERIOD OF ONE YEAR AFTER THE DATE O F TRANSFER OF THE ORIGINAL ASSET; OR (III) CONSTRUCTS ANY RESIDENTIAL HOUSE, OTHER THAN THE NEW ASSET, WITHIN A PERIOD OF THREE YEARS AFTER THE DAT E OF TRANSFER OF THE ORIGINAL ASSET; AND (B) THE INCOME FROM SUCH RESIDENTIAL HOUSE, OTHER THAN THE ONE RESIDENTIAL HOUSE OWNED ON THE DATE OF TRANSFER OF THE ORIGINAL ASSET, IS CHARGEABLE UNDER THE HEAD 'INCOME FROM HO USE PROPERTY'. EXPLANATION.FOR THE PURPOSES OF THIS SECTION, 'NET CONSIDERATION', IN RELATION TO THE TRANSFER OF A CAPITAL ASSET, MEANS THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER OF THE CAPITAL ASSET AS RE DUCED BY ANY EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY IN CONN ECTION WITH SUCH TRANSFER. (2) WHERE THE ASSESSEE PURCHASES, WITHIN THE PERIOD OF TWO YEARS AFTER THE DATE OF THE TRANSFER OF THE ORIGINAL ASSET, OR CONSTRUCTS, WITHIN THE PERIOD OF THREE YEARS AFTER SUCH DATE, ANY RESIDENT IAL HOUSE, THE INCOME FROM WHICH IS CHARGEABLE UNDER THE HEAD 'INC OME FROM HOUSE PROPERTY', OTHER THAN THE NEW ASSET, 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 SUCH NEW ASSET AS PROVIDED IN CLAUSE (A), OR, AS THE CASE MAY BE, CLAUSE (B), OF SUB-SECTION (1), SH ALL BE DEEMED TO BE INCOME CHARGEABLE UNDER THE HEAD 'CAPITAL GAINS' RE LATING TO LONG- TERM CAPITAL ASSETS OF THE PREVIOUS YEAR IN WHICH S UCH RESIDENTIAL HOUSE IS PURCHASED OR CONSTRUCTED. (3) WHERE THE NEW ASSET IS TRANSFERRED WITHIN A PER IOD OF THREE YEARS FROM THE DATE OF ITS PURCHASE OR, AS THE CASE MAY B E, ITS CONSTRUCTION, ITA NO.5156/MUM/2016 SMT. KALPANA PRADEEP AMBRE 6 THE AMOUNT OF CAPITAL GAIN ARISING FROM THE TRANSFE R OF THE ORIGINAL ASSET NOT CHARGED UNDER SECTION 45 ON THE BASIS OF THE COST OF SUCH NEW ASSET AS PROVIDED IN CLAUSE (A) OR, AS THE CASE MAY BE, CLAUSE (B), OF SUB-SECTION (1) SHALL BE DEEMED TO BE INCOME CHA RGEABLE UNDER THE HEAD 'CAPITAL GAINS' RELATING TO LONG-TERM CAPITAL ASSETS OF THE PREVIOUS YEAR IN WHICH SUCH NEW ASSET IS TRANSFERRE D. (4) THE AMOUNT OF THE NET CONSIDERATION WHICH IS NO T APPROPRIATED BY THE ASSESSEE TOWARDS THE PURCHASE OF THE NEW ASSET MADE WITHIN ONE YEAR BEFORE THE DATE ON WHICH THE TRANSFER OF THE O RIGINAL ASSET TOOK PLACE, OR WHICH IS NOT UTILISED BY HIM FOR THE PURC HASE OR CONSTRUCTION OF THE NEW ASSET BEFORE THE 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 LAT ER THAN THE DUE DATE APPLICABLE IN THE CASE OF THE ASSESSEE FOR FUR NISHING THE RETURN OF INCOME UNDER SUB-SECTION (1) OFSECTION 139 ] IN AN ACCOUNT IN ANY SUCH BANK OR INSTITUTION AS MAY BE SPECIFIED IN, AND UTI LISED IN ACCORDANCE WITH, ANY SCHEME WHICH THE CENTRAL GOVERNMENT MAY, BY NOTIFICATION IN THE OFFICIAL GAZETTE, FRAME IN THIS BEHALF AND S UCH RETURN SHALL BE ACCOMPANIED BY PROOF OF SUCH DEPOSIT; AND, FOR THE PURPOSES OF SUB- SECTION (1), THE AMOUNT, IF ANY, ALREADY UTILISED B Y THE ASSESSEE FOR THE PURCHASE OR 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 SU B-SECTION 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 T RANSFER OF THE ORIGINAL ASSET NOT CHARGED UNDER SECTION 45 ON THE BASIS OF THE COST OF THE NEW ASSET AS PROVIDED IN C LAUSE (A) OR, AS THE CASE MAY BE, CLAUSE (B) OF SUB-SECTI ON (1), EXCEEDS (B) THE AMOUNT THAT WOULD NOT HAVE BEEN SO CHARGE D HAD THE AMOUNT ACTUALLY UTILISED BY THE ASSESSEE FOR THE PU RCHASE OR CONSTRUCTION OF THE NEW ASSET WITHIN THE PERIOD SPECIFIED IN SUB-SECTION (1) BEEN THE COST OF THE N EW ASSET, SHALL BE CHARGED UNDER SECTION 45 AS INCOME OF THE PREVIOUS YEAR IN WHICH THE PERIOD OF THREE YEARS FROM THE DA TE OF THE TRANSFER OF THE ORIGINAL ASSET EXPIRES; AND (II) THE ASSESSEE SHALL BE ENTITLED TO WITHDRAW TH E UNUTILISED AMOUNT IN ACCORDANCE WITH THE SCHEME AFORESAID. EXPLANATION.[OMITTED BY THE FINANCE ACT, 1992, W.E .F. 1-4-1993.] 2.3. IF THE AFORESAID PROVISION OF THE ACT IS ANAL YZED SECTION 54F (4) SPEAKS ABOUT NET CONSIDERATION SUBJ ECT TO ITA NO.5156/MUM/2016 SMT. KALPANA PRADEEP AMBRE 7 THE PROVISIONS OF SUB-SECTION (4) IN CASE OF AN ASS ESSEE BEING AN INDIVIDUAL OR HUF WHICH IS NOT APPROPRIATE D BY THE ASSESSEE TOWARDS THE PURCHASE OF NEW ASSETS MAD E WITHIN THE SPECIFIED PERIOD OR WHICH IS NOT UTILIZE D BY HIM FOR THE PURCHASE OR CONSTRUCTION OF NEW ASSET. ACC ORDING TO THE ASSESSEE, SHE FILED HER RETURN ON 28/03/2014 I. E. BEFORE THE DUE DATE OF FILING OF RETURN I.E. 31/03/ 2014 IN TERMS OF SECTION 139(4) AND UTILIZED THE AMOUNT OF LONG TERM CAPITAL GAINS FOR PURCHASING THE RESIDENTIAL F LATS VIDE AGREEMENT DATED 16/01/2013 (REGISTERED ON 29/01/201 3), THEREFORE, THE CLAIMED EXEMPTION UNDER SECTION 54F WAS RIGHTLY GRANTED TO THE ASSESSEE. THE CASE OF THE AS SESSEE FIND SUPPORTS FROM THE DECISION OF THE TRIBUNAL IN THE CASE OF KISHORE H GALAIIYA VS INCOME TAX OFFICER (2012) 137 ITD 229 (MUM. TRIB.), ANOTHER DECISION IN CIT VS JAGRAT I AGARWAL (2011) 339 ITR 610 ( P & H), WHEREIN, HON'B LE COURT HELD AS UNDER:- REVENUE IS IN APPEAL AGGRIEVED AGAINST AN ORDER P ASSED BY THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH, CHANDIGAR H (FOR SHORT THE 'THE TRIBUNAL') ON 13.8.2010 IN RESPECT OF ASSESSME NT YEAR 2006-2007. THE REVENUE HAS CLAIMED THE FOLLOWING SUBSTANTIAL Q UESTION OF LAW, AS ARISEN FROM THE ORDER OF THE TRIBUNAL: ITA NO.5156/MUM/2016 SMT. KALPANA PRADEEP AMBRE 8 'WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN AW THE ITAT WAS JUSTIFIED IN ALLOWING THE BENEFIT OF EXEMPTION UNDER SECTION 44 OF THE INCOME TAX ACT BY WRONGLY INTERPRETING SECTION 54 OF THE I.T. ACT IN WHICH THE DUE DATE FOR FURNISHING THE RETURN OF INC OME IS MENTIONED AS PER SECTION 139(1) AND NOT AS PER SECTION 139(4) OF THE ACT?' THE ASSESSEE SOLD HER HOUSE PROPERTY FOR RS. 45 LAC S AND CLAIMED DEDUCTION UNDER SECTION 54 OF THE INCOME TAX ACT, 1 961 (FOR SHORT 'THE ACT'). THE ASSESSEE WAS SERVED WITH A OTICE UNDER S ECTION 142(1)OF THE ACT, AS TO WHY THE AMOUNT DEDUCTED BE NOT ADDED TO HER INCOME AS LONG TERM CAPITAL GAIN, AS THE ASSESSEE FAILED TO DEPOSI T THE AMOUNT IN CAPITAL GAIN ACCOUNT SCHEME AND ALSO FAILED TO PURCHASE HOU SE PROPERTY BEFORE THE DUE ITA NO. 176 OF 2011 DATE OF FILING THE RETU RN OF INCOME. THE ASSESSEE CONTESTED THE CLAIM OF THE REVENUE AND ASS ERTED THAT SHE IS NOT LIABLE TO DEPOSIT THE AMOUNT IN CAPITAL GAIN DEPOSI T SCHEME AND THAT THE DUE DATE OF FILING THE RETURN OF INCOME TAX IS NOT AS SPECIFIED IN SECTION 139(1) BUT AS SPECIFIED IN SECTION 139(4) OF THE AC T. THE ASSESSING OFFICER DECLINED THE CLAIM OF THE ASSESSEE AND RETU RNED FINDING THAT THE ASSESSEE HAS CONCEALED HER PARTICULARS OF INCOME AN D INITIATED PROCEEDINGS FOR PENALTY AS WELL. THE APPEAL AGAINST THE SAID ORDER WAS ACCEPTED BY T HE COMMISSIONER OF INCOME TAX (APPEALS). IT WAS FOUND THAT THE APPELLA NT HAS PURCHASED NEW RESIDENTIAL PROPERTY ON 2.1.2007 AND THE DUE DATE A S PERSECTION 139(4) IS 31.3.2007 AND THUS, THE ASSESSEE HAS COMPLIED WITH THE PROVISIONS OF SECTION 54 OF THE ACT. IT WAS HELD THAT SECTION 139 INCLUDES SUB SECTION (4) AS WELL. THE SAID ORDER OF THE COMMISSI ONER OF INCOME TAX HAS BEEN AFFIRMED IN APPEAL AS WELL. IT MAY BE NOTICED THAT THE ASSESSEE SOLD HER RESIDE NTIAL HOUSE ON 13.1.2006 FOR A SUM OF RS. 45 LACS AND PURCHASED AN OTHER PROPERTY JONTLY WITH MR. D. P. AZAD, HER FATHER-IN-LAW ON 2.1.2007 FOR A CONSIDERATION OF RS. 95 LACS. THE DUE DATE OF FILING OF RETURN AS PE R SECTION 139(1) OF THE ACT WAS 31.7.2006, BUT THE ASSESSEE FILED HER RETUR N ON 28.3.2007 AND THAT EXTENDED DUE DATE OF FILING OF RETURN AS PER S ECTION 139(4) IS 31.3.2007. SECTION 54 OF THE ACT CONTEMPLATES THAT THE CAPITAL GAIN ARISES FROM THE TRANSFER OF A LONG TERM CAPITAL ASSET, BUT IF THE A SSESSEE WITHIN A PERIOD OF ONE YEAR BEFORE OR TWO YEARS AFTER THE DATE ON WHIC H THE TRANSFER TOOK PLACE PURCHASES RESIDENTIAL HOUSE, THEN INSTEAD OF THE CAPITAL GAIN, THE INCOME WOULD BE CHARGED IN TERMS OF PROVISIONS OF S UB SECTION (1) OF SECTION 54. AS PER SUB-SECTION (2), IF THE AMOUN T OF CAPITAL GAINS IS NOT ITA NO. 176 OF 2011 APPROPRIATED BY THE ASSESSE E TOWARDS THE PURCHASE OF NEW ASSET WITHIN ONE YEAR BEFORE THE DA TE ON WHICH THE TRANSFER OF THE ORIGINAL ASSET TOOK PLACE, OR WHICH IS NOT UTILIZED BY HIM FOR THE PURCHASE OR CONSTRUCTION OF THE NEW ASSET B EFORE THE DATE OF FURNISHING THE RETURN OF INCOME UNDER SECTION 139, THE AMOUNT SHALL BE ITA NO.5156/MUM/2016 SMT. KALPANA PRADEEP AMBRE 9 DEPOSITED BY HIM BEFORE FURNISHING SUCH RETURN NOT LATER THAN DUE DATE APPLICABLE IN THE CASE OF ASSESSEE FOR FURNISHING T HE RETURN OF INCOME UNDER SUB SECTION (1) OF SECTION 139 IN AN ACCOUNT IN ANY SUCH BANK OR INSTITUTION AS MAY BE SPECIFIED. RELEVANT SUB-SECTI ON (2) OF SECTION 54 OF THE ACT READS AS UNDER: '(2) THE AMOUNT OF THE CAPITAL GAIN WHICH IS NOT AP PROPRIATED BY THE ASSESSEE TOWARDS THE PURCHASE OF THE NEW ASSET MADE WITHIN ONE YEAR BEFORE THE DATE ON WHICH THE TRANSFER OF THE ORIGIN AL ASSET TOOK PLACE, OR WHICH IS NOT UTILIZED BY HIM FOR THE PURCHASE OR CO NSTRUCTION OF THE NEW ASSET BEFORE THE DATE OF FURNISHING THE RETURN OF I NCOME UNDER SECTION 139, SHALL BE DEPOSITED BY HIM BEFORE FURNISHING SU CH RETURN SUCH DEPOSIT BEING MADE IN ANY CASE NOT LATER THAN THE DUE DATE APPLICABLE IN THE CASE OF THE ASSESSEE FOR FURNISHING THE RETURN OF INCOME UNDER SUB-SECTION (1) OF SECTION 139 IN AN ACCOUNT IN ANY SUCH BANK OR IN STITUTION AS MAY BE SPECIFIED IN, AND UTILIZED IN ACCORDANCE WITH, ANY SCHEME WHICH THE CENTRAL GOVERNMENT MAY, BY NOTIFICATION IN THE OFFI CIAL GAZETTEE, FRAME IN THIS BEHALF AND SUCH RETURN SHALL BE ACCOMPANIED BY PROOF OF SUCH DEPOSIT, AND FOR THE PURPOSES OF SUB-SECTION (1), T HE AMOUNT, IF ANY, ALREADY UTILIZED BY THE ASSESSEE FOR THE PURCHASE O R CONSTRUCTION OF THE NEW ASSET TOGETHER WITH THE AMOUNT SO DEPOSITED SHA LL BE DEEMED TO BE THE COST OF THE NEW ASSET: PROVIDED THAT IF THE AMOUNT DEPOSITED UNDER THIS SU B-SECTION IS NOT UTILIZED WHOLLY OR PARTLY FOR THE PURCHASE OR CONST RUCTION OF THE NEW ASSET WITHIN THE PERIOD SPECIFIED IN SUB-SECTION (1), THE N,- (I) THE AMOUNT NOT SO UTILIZED SHALL BE CHARGED UND ER 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 SUC H AMOUNT IN ACCORDANCE WITH THE SCHEME AFORESAID.' ITA NO. 176 OF 2011 THE QUESTION WHICH ARISES IS; W HETHER THE RETURN FILED BY THE ASSESSEE BEFORE THE EXPIRY OF THE YEAR ENDING WITH THE ASSESSMENT YEAR IS VALID UNDER SECTION 139(4) OF TH E ACT. LEARNED COUNSEL FOR THE REVENUE HAS ARGUED THAT THE ASSESSEE WAS REQUIRED TO FILE RETURN UNDER SUB SECTION (1) OF SE CTION 139 OF THE ACT IN TERMS OF SUB SECTION (2) OF SECTION 54 OF THE ACT. IT IS CONTENDED THAT SUB SECTION (4) IS NOT APPLICABLE IN RESPECT OF THE ASS ESSEE SO AS TO AVOID PAYMENT OF LONG TERMS CAPITAL GAIN. ON THE OTHER HAND, LEARNED COUNSEL FOR THE RESPONDE NT RELIES UPON A DIVISION BENCH JUDGMENT OF KARNATAKA HIGH COURT REP ORTED AS FATHIMA BAI VS. INCOME TAX OFFICER (2009) 32 DTR 243, WHERE IN SOMEWHAT SIMILAR CIRCUMSTANCES, IT HAS BEEN HELD THAT TIME L IMIT FOR DEPOSIT UNDER SCHEME OR UTILIZATION CAN BE MADE BEFORE THE DUE DA TE FOR FILING OF RETURN UNDER SECTION 139(4) OF THE ACT. LEARNED COUNSEL FO R THE RESPONDENT ALSO ITA NO.5156/MUM/2016 SMT. KALPANA PRADEEP AMBRE 10 RELIES UPON A DIVISION BENCH JUDGMENT OF GAUHATI HI GH COURT REPORTED AS COMMISSIONER OF INCOME TAX VS RAJESH KUMAR JALAN (2006) 286 ITR 274. HAVING HEARD LEARNED COUNSEL FOR THE PARTIES, WE ARE OF THE OPINION THAT SUB-SECTION (4) OF SECTION 139 OF THE ACT IS, IN FACT, A PROVISO TO SUB-SECTION (1) OF SECTION 139 OF THE ACT. SECTION 139 OF THE ACT FIXES THE DIFFERENT DATES FOR FILING THE RETURNS FOR DIFF ERENT ASSESSES. IN THE CASE OF ASSESSEE AS THE RESPONDENT, IT IS 31ST DAY OF JU LY OF THE ASSESSMENT YEAR IN TERMS OF CLAUSE (C) OF THE EXPLANATION 2 TO SUB-SECTION 1 OF SECTION 139 OF THE ACT, WHEREAS SUB-SECTION (4) OF SECTION 139 PROVIDES FOR EXTENSION IN PERIOD OF DUE DATE IN CERTAIN CIRC UMSTANCES. IT READS AS UNDER: ITA NO. 176 OF 2011 '(4) ANY PERSON WHO HAS NOT FURNISHED A RETURN WITHIN THE TIME ALLOWED TO HIM UNDER SUB-SEC TION (1), OR WITHIN THE TIME ALLOWED UNDER A NOTICE ISSUED UNDER SUB-SE CTION (1) OF SECTION 142, MAY FURNISH THE RETURN FOR ANY PREVIOUS YEAR A T ANY TIME BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASS ESSMENT YEAR OR BEFORE THE COMPLETION OF THE ASSESSMENT WHICHEVER IS EARLI ER; PROVIDED THAT WHERE THE RETURN RELATES TO A PREVIOU S YEAR RELEVANT TO THE ASSESSMENT YEAR COMMENCING ON THE 1ST DAY OF APRIL 1988, OR ANY EARLIER ASSESSMENT YEAR, THE REFERENCE TO ONE YEAR AFORESAI D SHALL BE CONSTRUED AS A REFERENCE TO TWO YEARS FROM THE END OF THE RELEVA NT ASSESSMENT YEAR'. A READING OF THE AFORESAID SUB-SECTION WOULD SHOW THA T IF A PERSON HAS NOT FURNISHED THE RETURN OF THE PREVIOUS YEAR WITHIN TH E TIME ALLOWED UNDER SUB-SECTION (1) I.E. BEFORE 31ST DAY OF JULY OF THE ASSESSMENT YEAR, THE ASSESSEE CAN FILE RETURN BEFORE THE EXPIRY OF ONE Y EAR FROM THE END OF THE RELEVANT ASSESSMENT YEAR. THE SALE OF THE ASSET HAVING BEEN TAKEN PLACE ON 13 .1.2006, FALLING IN THE PREVIOUS YEAR 2006-2007, THE RETURN COULD BE FILED BEFORE THE END OF RELEVANT ASSESSMENT YEAR 2007-2008 I.E. 31.3.2007. THUS, SUB- SECTION (4) OF SECTION 139 PROVIDES EXTENDED PERIOD OF LIMI TATION AS AN EXCEPTION TO SUB-SECTION (1) OF SECTION 139 OF THE ACT. SUB-S ECTION (4) IS IN RELATION TO THE TIME ALLOWED TO AN ASSESSEE UNDER S UB-SECTION (1) TO FILE RETURN. THEREFORE, SUCH PROVISION IS NOT AN INDEPEN DENT PROVISION, BUT RELATES TO TIME CONTEMPLATED UNDER SUB-SECTION (1) OF SECTION 139. THEREFORE, SUCH SUB-SECTION (4) HAS TO BE READ ALON G WITH SUB-SECTION (1). SIMILAR IS THE VIEW TAKEN BY THE DIVISION BENC H OF KARNATAKA AND GAUHATI HIGH COURTS IN FATIMA BAI AND RAJESH KUMAR JALAN CASES (SUPRA) RESPECTIVELY. ITA NO. 176 OF 2011 IN VIEW OF THE ABOVE, WE FIND T HAT DUE DATE FOR FURNISHING THE RETURN OF INCOME AS PER SECTION 139( 1) OF THE ACT IS SUBJECT TO THE EXTENDED PERIOD PROVIDED UNDER SUB-S ECTION (4) OF SECTION 139 OF THE ACT. CONSEQUENTLY, THE QUESTION OF LAW IS ANSWERED AGAIN ST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. THUS, THE PRESENT APPEAL IS DISMISSED. ITA NO.5156/MUM/2016 SMT. KALPANA PRADEEP AMBRE 11 THE ASSESSEE FURTHER FIND SUPPORT FROM THE DECISION IN THE CASE OF ACIT VS ASHA ASHOK BOOB (2015) 59 TAXMANN.COM 173(PUNE TRIB.), ANIL KUMAR OMKAR SINGH ARORA VS INCOME TAX OFFICER (2013) 37 CCH 221 (MUMB AI). SINCE, THE ASSESSEE UTILIZED THE AMOUNT BEFORE DUE DATE OF FILING OF RETURN AS PER SECTION 139(4) OF THE ACT, THEREFORE, THE UTILIZED PORTION IN THE NEW ASSET WAS RIGHTLY E XEMPTED UNDER SECTION 54F OF THE ACT. THUS, WE AFFIRM THE S TAND OF THE LD. COMMISSIONER OF INCOME TAX (APPEAL), RESULT ING INTO DISMISSAL OF APPEAL. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 04/06/2018. SD/- (G. MANJUNATHA) SD/- (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER % & MUMBAI; - DATED : 04/06/2018 F{X~{T? P.S/. .. , %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. ./01 / THE APPELLANT 2. 2301 / THE RESPONDENT. ITA NO.5156/MUM/2016 SMT. KALPANA PRADEEP AMBRE 12 3. 4 4 % 5$ , ( ./ ) / THE CIT, MUMBAI. 4. 4 4 % 5$ / CIT(A)- , MUMBAI 5. 78 2$ ! , 4 ./( .! , % & / DR, ITAT, MUMBAI 6. 9' :& / GUARD FILE. / BY ORDER, / (DY./ASSTT. REGISTRAR) , % & / ITAT, MUMBAI