Sh. Sumit Munjral S/O Harsharan Singh Munjral, Amritsar. V. The Income Tax Officer, Amritsar.

ITA 601/ASR/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5617 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 23-02-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 18-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAHUL DHAWANLD
• Assessee Lawyers: ASHWANI KALIA LD
• Keywords: Capital asset; Search and seizure; Salary income; Period of limitation
• Section: 54F; 142(1); 234B; 54; 139; 10

Judgement Text

IN THE INCOME TAX APPELLATE T RIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH.T.S. KAPOOR, ACCOUNTANT MEMBER AND SH.N.K.CHOUDHRY, JUDICIAL MEMBER I.T.A. NO. 601(ASR)/2015 ASSESSMENT YEAR:2011-12 SH. SUMIT MUNJRAL, S/O, HARSHARAN SINGH MUNJRAL, 70, MUNJRAL BROTHERS, RAILWAY LINK ROAD, AMRITSAR. PAN: ADLPM-4101E VS. INCOME TAX OFFICER, WARD 5(4), AMRITSAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. ASHWANI KALIA (LD.C.A) RESPONDENT BY: SH. RAHUL DHAWAN (LD. DR) DATE OF HEARING : 23.02.2017 DATE OF PRONOU NCEMENT: 05.05.2017 ORDER PER N. K. CHOUDHRY (JM): THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-2, AMRITSAR, DATED 02.07.2015, FOR ASST. YEAR:2 011-12. 2. THE FOLLOWING GROUNDS HAS BEEN TAKEN BY THE ASSESSEE. (I) THAT THE LD. CIT(A)-2, AMRITSAR HAS ERRED IN LAW AND ON FACTS, IN CONFIRMING THE DISALLOWANCE OF DEDUCTION CLAIMED U/S 54 OF AMOUNTING TO RS.15,36,350/- (II) THAT THE ORDER IS BAD IN LAW AND ON FACTS. 3. THE BRIEF FACTS OF THE CASE AS SET OUT IN ASSESSMENT ORDER A RE AS UNDER: RETURN DECLARING NET INCOME OF RS.2,99,820/- WAS FILE D BY THE ASSESSEE ON 29 H DAY OF MARCH, 2012. IT IS LATE AND INTEREST UNDER SECTION 234A OF THE INCOME- TAX ACT, 1961 IS TO BE CHARGED. RETURN WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME-TAX ACT, 1961. SUBSEQUENTLY THE CASE WAS SELE CTED FOR SCRUTINY THROUGH I TA NO. 601(ASR)/2015 ASST. YEAR: 2011-12 2 CASS AND NOTICE UNDER SECTION 143(2) OF THE INCOME-T AX ACT, 1961 WAS ISSUED ON 10.09.2012 AND SERVED ON THE ASSESSEE ON 10.09.2012 WELL WITHIN THE STIPULATED TIME LIMIT. VIDE LETTER DATED 10.04.2013, THE ASSES SEE WAS ASKED TO FURNISH COPY OF COMPUTATION/STATEMENT OF TOTAL INCOME AND COPY O F AUDIT REPORT IN FORM 3CB & 3CD ALONG WITH RELEVANT ARMEXURE. SHRI TARUN KUMAR VERMA, ADVOCATE AND AUTHORIZED REPRESENTATIVE OF THE ASSESSEE APPEARED AND FURNISHE D HIS POWER OF ATTORNEY ALONG WITH LETTER DATED 26.04.2013 AND ALS O FURNISHED COPY OF COMPUTATION/STATEMENT OF INCOME ALONG WITH COPY OF ITR-V. REGARDING TAX AUDIT REPORT IT IS SUBMITTED THAT SINCE THE ASSESSEE IS N OT SUBJECT TO TAX AUDIT, NO AUDIT REPORT IS APPLICABLE IN FORM NO. 3CB &3CD. THE ASSES SEE DERIVES INCOME FROM SALARY AND WORKING REMUNERATION AND INTEREST ON CAP ITAL FROM THE PARTNERSHIP FIRM. FROM THE COMPUTATION OF INCOME, IT APPEARS TH AT THE ASSESSEE HAS SOLD HOUSE PROPERTY, IN WHICH, HE WAS HAVING H SHARE FOR AN AM OUNT OF RS.52,50,000/- AND SHOWN CAPITAL GAIN AMOUNTING TO RS.21,75,850/- AND A DJUSTED THE SAME UNDER SECTION 54 OF THE INCOME-TAX ACT, 1961 AGAINST THE P URCHASE OF HOUSE PROPERTY AMOUNTING TO RS.74,70,750/- BEING SHARE IN THE P ROPERTY. ANOTHER SHARE IS IN THE NAME OF SHRI RAIDEEP MUNJRAL BROTHER OF THE ASS ESSEE. NOTICES ISSUED UNDER SECTION 143(2) AND 142(1) OF T HE INCOME-TAX ACT, 1961 ALONG WITH QUESTIONNAIRE ARE COMPLIED WITH AND NECE SSARY INFORMATION WAS FURNISHED BY THE ASSESSEE TIME TO TIME THROUGH HIS AUTHORIZED REPRESENTATIVE SHRI TARUN KUMAR VERMA, ADVOCATE. IN RESPONSE TO NOTICE U NDER SECTION 142(1) OF THE INCOME-TAX ACT, 1961 AND QUESTIONNAIRE DATED 23.07.2 013, WHERE IN THE ASSESSEE WAS ASKED TO EXPLAIN THE EVIDENCE OF SALE OF IMMOVE ABLE PROPERTY WORTH RS.1,05,00,000/-, ASSESSEE HAS FURNISHED REPLY VIDE LETTER DATED 23.10.2013 VIDE PARA 6 AND HAS EXPLAINED THE SALE OF HOUSE AND CLAI M OF EXEMPTION UNDER SECTION 54 OF THE INCOME-TAX ACT, 1961. REPLY OF THE ASSESSEE , IS RE-PRODUCED AS UNDER:- 'DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE S OLD A FLAT NO.708-B,RAHEJA VIHAR COMPLEX, TUNGWA, MUMBAI - 400072 FOR RS.1,05,00,000 /- IN WHICH HE WAS HAVING ID SHARE WITH HIS BROTHER SHRI RAIDEEP MUNJRAL. THE SA ID FLAT WAS PURCHASED ON 08.06.2006 FOR RS.44,88,000/-(PURCHASE VALUE RS.42,89,500/- + STAMP PAPER RS.1,98,500/-). COPY OF THE REGISTERED PURCHASE DEED DATED 08.06.2006 IS EN CLOSED AT PAGE NO. 7 -71. THE SAID FLAT WAS SOLD ON 17.02.2011 FOR A CONSIDERATION OF RS.1, 05,00,000/-. THE ASSESSEE WAS HAVING ID SHARE IN THE SAID FLAT. COPY OF SALE DEED DATED 17.02.2011 IS ENCLOSED AT PAGE NO. 72- 101. LONG TERM CAPITAL GAIN ARISING ON THE SALE OF ABOVE SAID FLAT WAS RETURNED IN THE INCOME TAX RETURN FOR THE RELEVANT YEAR. THE ASSESS EE CLAIMED EXEMPTION U/S 54 AGAINST I TA NO. 601(ASR)/2015 ASST. YEAR: 2011-12 3 THE SAID LTCG. DETAIL OF INVESTMENT CLAIMING EXEMPT ION U/S 54 WILL BE FURNISHED DURING NEXT HEARING.'............. FROM THE ABOVE IT IS VERY CLEAR THAT THE AMOUNT WAS EITHER TO BE UTILIZED FOR THE PURCHASE OF NEW ASSET OR WAS TO BE KEPT IN ANY SCHEME AS NOTIFIED BY THE CENTRAL GOVERNMENT IN THIS REGARD. THE ASSESSEE SOL D THE FLAT ON 17.02.2011 I.E. IN THE FINANCIAL YEAR 2010-11 RELEVANT TO THE ASSES SMENT YEAR 2011-12 FOR THE CONSIDERATION OF RS.52,50,000/- BEING VI SHARE OF TO TAL CONSIDERATION OF FLAT OF RS.1,05,00,000/-. THIS AMOUNT WAS EITHER TO BE SPEN T ON THE PURCHASE OF NEW ASSET OR INVESTED IN A SCHEME NOTIFIED BY THE CENTR AL GOVERNMENT IN THIS REGARD AND ITS EFFECT, WAS TO BE FURNISHED IN THE RETURN O F INCOME AS TO BE FILED UNDER SECTION 139(1) OF THE INCOME-TAX ACT, 1961 FOR WHIC H THE DUE DATE FOR FILLING OF INCOME-TAX RETURN FOR THE YEAR UNDER CONSIDERATION WAS 30.09.2011. FROM THE DETAILS BELOW IT IS CLEAR THAT THE ASSESSEE HAS SPE NT ONLY RS.6,39,500/- FROM THE TOTAL SALE CONSIDERATION AND REST OF THE MONEY WAS EITHER GIVEN TO CONCERNS WHERE THE ASSESSEE HAS INTERESTS AS PARTNER OR SPEN T ON THE REPAYMENT OF HOUSING LOAN TAKEN AGAINST THE SAID SELLING FLAT. T HE CONSIDERATION WHICH WAS NOT UTILIZED WAS TO BE DEPOSITED IN A SCHEME ON OR BEFORE 30.09.2011 BUT THE ASSESSEE HAS FAILED AND DEPOSITED THIS AMOUNT IN TH E CONCERNS, WHERE THE ASSESSEE WAS INTERESTED AS PARTNER. THUS THE ASSESS EE HAS VIOLATED THE PROVISIONS OF SECTION 54 OF THE INCOME-TAX ACT, 196 1. THIS IS VERY CLEAR FROM THE INFORMATION GIVEN BY THE ASSESSEE REGARDING AMOUNT SPENT ON THE PURCHASE OF NEW FLAT, WHICH WAS UNDER CONSTRUCTION AND THE POSS ESSION OF WHICH WAS TO BE ALLOWED IN FUTURE BUT IS CLEAR THAT THE AMOUNT WAS NOT SPENT BEFORE THE SPECIFIED DATE AND ALSO NOT KEPT IN THE SCHEME AS NOTIFIED BY THE CENTRAL GOVERNMENT. THE INFORMATION GIVEN BY THE ASSESSEE IN THIS REGARD IS AS UNDER:- DETAIL OF PAYMENTS TOWARDS THE ABOVE SAID INVESTMEN T. S. NO. DATE PARTICULARS AMOUNT 1 . 11.04.2011 STAMP PAPER 6,39,500/- 2. 10.10.2011 REGISTRATION CHARGES 30,000/- 3. 02.08.2012 FROM SUMIT MUNJRAL S/A 1,50,000/- 4. 01.09.2012 FROM SUMIT MUNJRAL S/A 75,000/- 5. 14.09.2012 FROM SUMIT MUNJRAL S/A 1,75,000/- 6. 02.08.2012 FROM RAIDEEP MUNJRAL S/A 1,50,000/- 7. 01.09.2012 FROM RAIDEEP MUNJRAL S/A 1,75,000/- 8. 14.09.2012 FROM RAIDEEP MUNJRA 1 S/A 1,75,000/- 9. 04.01.2011 FROM MUNJRAL BROTH P LTD. . 5,12,875/- 10. 31.10.2011 FROM MUNJRAL BROTH P LTD. 1,42,180/- 9. 19.11.2011 HOUSING LOAN FROM DHEL . 73,34,792/- 10 31.10.2012 HOUSING LOAN FROM DHEL 31.54.664/- TOTAL PAYMENTS TILL FILING OF ITR 1.28.14.011/- I TA NO. 601(ASR)/2015 ASST. YEAR: 2011-12 4 FROM THE DETAILS, SO FURNISHED, IT IS CLEAR THAT TH E ASSESSEE HAS NOT INVESTED THE AMOUNT ON THE PURCHASE OF NEW FLAT BEF ORE THE SPECIFIED DATE I.E.30.09.2011 AND HAS ALSO NOT KEPT THE AMOUNT IN THE SCHEME AS NOTIFIED BY THE CENTRAL GOVERNMENT BUT INVESTED THE SAME IN THE FIR MS IN WHICH THE ASSESSEE HAS INTERESTS. EXEMPTION CLAIMED UNDER SECTION 54 OF TH E INCOME-TAX ACT, 1961 CANNOT BE ALLOWED AND AMOUNT OF RS.21,75,850/-IS TAXED AS I NCOME OF THE ASSESSEE FROM LONG TERM CAPITAL GAIN UNDER SECTION 45 OF THE INCO ME-TAX ACT, 1961. INCOME OF RS.21,75,850/- IS DETERMINED AS INCOME FROM LONG TER M CAPITAL GAIN AND IS TAXED ACCORDINGLY. I AM SATISFIED THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF HIS INCOME AND AS SUCH FOR THIS DEFA ULT PENALTY PROCEEDINGS UNDER SECTION 271(L)(C) OF THE INCOME-TAX ACT, 1961. WITH THESE OBSERVATIONS, INCOME OF THE ASSESSEE IS COMPUTED AS UNDER:- INCOME AS DECLARED BY THE ASSESSEE RS.2 ,99,820/- INCOME FROM LONG TERM CAPITAL GAIN AS DISCUSSED ABOVE RS.21,75,850/- THE ASSESSEE HAS FURNISHED RETURN OF INCOME LATE AN D FOR THIS DEFAULT INTEREST UNDER SECTION 234A OF THE INCOME-TAX ACT, 1 961 IS BEING CHARGED. THE ASSESSEE HAS ALSO NOT PAID ADVANCE TAX AS PER PROVI SIONS OF SECTION 210 OF THE INCOME-TAX ACT, 1961 AND FOR THIS 1 DEFAULT INTEREST UNDER SECTION 234B & 234C OF THE INCOME-TAX ACT, 1961 IS BEING CHARGED. THE ASSES SEE HAS FURNISHED INACCURATE PARTICULARS OF HIS INCOME. PENALTY NOTICE UNDER SEC TION 274 FOR DEFAULT UNDER SECTION 271(L)(C) OF THE INCOME-TAX ACT, 1961 IS ISS UED SEPARATELY. 4. FEELING AGGRIEVED BY THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER, THE ASSESSEE PREFERRED THE FIRST APPEAL BE FORE THE LD. CIT(A), WHO ALSO DISMISSED THE APPEAL OF THE ASSESSEE BY HOLDING AS UNDER: I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE. IN THE WRITTEN SUBMISSIONS THE APPELLANT HAS TRIED TO DIVERT THE ISSUE AND HAS FAI LED TO NOTICE THAT THE AO HAD DISALLOWED THE CLAIM OF EXEMPTION U/S 54 OF ACT BECA USE THE ASSESSEE HAD NOT INVESTED THE AMOUNT OF CAPITAL GAIN ARISING ON THE SALE OF FLAT ON 17.02.2011 FOR CONSIDERATION OF RS.52,50,500/- IN PURCHASE OF NEW A SSET OR IN A SCHEME NOTIFIED BY THE CENTRAL GOVERNMENT IN THIS REGARD WITHIN THE SPECIFIED PERIOD. FROM THE I TA NO. 601(ASR)/2015 ASST. YEAR: 2011-12 5 FACTS DISCUSSED IN THE ASSESSMENT ORDER THE ASSESSE E HAD SPENT ONLY RS.6,39,500/- FROM THE TOTAL SALE CONSIDERATION AND THE BALANCE AMOUNT WAS EITHER GIVEN TO CONCERN WHERE THE ASSESSEE HAD INTE REST AS A PARTNER OR WAS SPENT ON THE REPAYMENT OF HOUSING LOAN TAKER AGAINST THE SAID SELLING FLAT. SINCE THE APPELLANT HAD NOT INVESTED THE AMOUNT OF CAPITAL GAIN ARISING ON SALE OF FLAT ON 17.02.2011 ON PURCHASE OF NEW FLAT NOR INVE STED THE AMOUNT IN A SCHEME NOTIFIED BY THE CENTRAL GOVERNMENT IN THIS REGARD, BUT INSTEAD INVESTED THE SAME IN FIRMS IN WHICH THE APPELLANT HAD INTERESTS AS A PAR TNER OR SPENT ON REPAYMENT OF HOUSING LOAN TAKEN AGAINST THE SELLING FLAT, THEREF ORE THE AO HAD RIGHTLY EXEMPTION CLAIMED U/S 54 OF THE ACT WHICH ACTION OF THE AO IS U PHELD. ACCORDINGLY, THE ASSESSMENT OF INCOME FROM LONG TERM CAPITAL GAINS U PHELD/CONFIRMED, IN PRINCIPLE SUBJECT TO THE FINDING ON GROUND OF APPEAL NO. 2 RE GARDING THE QUANTIFICATION OF LONG CAPITAL GAINS. (II) THE GROUND OF APPEAL NO.2 IS THAT WHILE MAKING THE TAX CALCULATION, THE ACCEPTED DEDUCTION U/S 54 AT RS.639500/- BY THE AO WA S NOT ACCOUNTED FOR. IT IS OBSERVED THAT IN THE ASSESSMENT ORDER THE AO H AS HELD THAT THE ASSESSEE HAD SPENT ONLY RS.6,39,500/- FROM THE TOTAL SALE CONSIDERATION ON NEW ASSET. FROM THE DETAILS FURNISHED BEFORE THE AO THE APPELLANT HAD SPENT RS.6,39,500/- ON 11.04.2011 ON PURCHASE OF STAMP PAP ERS FOR ACQUIRING THE NEW ASSET. ACCORDINGLY THE APPELLANT IS ALLOWED THE EXEM PTION OF RS.6,39,500/- U/S 54(L)(I) OF THE ACT AND THE INCOME FROM LONG TERM CA PITAL GAINS OF RS. (21,75,850/- - 6,39,500/-) = 15,36,350/- IS CONFIRMED. 5. FEELING AGGRIEVED BY THE SAID ORDER PASSED BY THE LD. CIT(A), THE ASSESSEE PREFERRED THE INSTANT APPEAL AND IN SUPPOR T OF HIS CASE SUBMITTED THAT THE APPELLANT DURING THE FINANCIAL YEAR RELEVANT TO ASSESSMENT YEAR UNDER APPEAL SOLD FLAT ON 17.2.2011 FOR RS.5250000 BEING 1/2 SHARE. THE CAPITAL GAIN ON SALE OF FLAT WAS WORKED OUT AT RS.2 175850. THE SAID AMOUNT OF CAPITAL GAIN WAS CLAIMED EXEMPT U/S 5 4 HAVING BEEN INVESTED IN THE PURCHASE OF NEW FLAT BEFORE THE D UE DATE OF FILING OF RETURN OF INCOME U/S 139 I.E. 31.3.2012. THE WORKI NG OF CAPITAL GAIN AS WELL AS THE AMOUNTS PAID FOR THE PURCHASE OF NEW FLA T IS GIVEN IN THE ASSESSMENT ORDER AT PAGE 3. THE ASSESSEE HAS FILED RETURN OF INCOME ON 29.3.201 2 AND TILL DATE OF FILING OF RETURN, THE ASSESSEE HAD MADE SUBSTANT IAL AMOUNT OF I TA NO. 601(ASR)/2015 ASST. YEAR: 2011-12 6 INVESTMENT IN THE PURCHASE OF RESIDENTIAL HOUSE DET AIL OF WHICH IS ALREADY GIVEN BY THE AO IN THE ASSESSMENT ORDER. FROM THE PERUSAL OF DETAIL OF INVESTMENT IT WILL BE OBSERVED THAT OUT OF TOTAL PAYMENT A SUM OF RS.86,59,347 WAS PAID BEF ORE 31.3.2012 WHICH IS THE DUE DATE OF FILING OF RETURN OF INCOME U/S 1 39(4). THE LD. A R FURTHER SUBMITTED THAT THE ASSESESE HAD NO T PAID ONLY RS.639500 FOR THE PURCHASE OF HOUSE BUT HAD ALSO PAID A SUM OF RS.512875 ON 4.1.2011 WHICH IS DULY MENTIONED BY THE A O IN THE ASSESSMENT ORDER WHICH GIVES THE DETAIL OF INVESTMENTS MADE BY THE APPELLANT. THE ASSESSEE ALSO RELIED ON THE FOLLOWING CASE LAWS. (I) CIT VS. MS. JAGRITI AGGARWAL 339 ITR 0610, (P&H) (II) CIT VS. SHRI JAGTAR SINGH CHAWALA IN ITA NO.71 (P&H). (III) FATHIMA BAI VS. INCOME TAX OFFICER, 32 DTR 02 43 (KAR.) (IV) CIT VS. RAJESH KUMAR JALAN 286 ITR 0274 (GAUHA TI HIGH COURT) THE LD. A R FURTHER SUBMITTED THAT THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE AFORESAID DECISIONS HELD THAT TIME LIMIT FOR MAKING DEPOSIT UNDER THE SCHEME VIZ-A-VIZ PURCHASE OF NEW HOUSE PROPERTY AS PER SUB SECTION (2) OF SECTION 54 THE AMOUNT OF CAP ITAL GAIN IS REQUIRED TO BE DEPOSITED BEFORE FURNISHING THE RETURN NOT LATER THAN DUE DATE U/S 139(1) IN A SPECIFIED ACCOUNT ONLY IF SUCH AMOUNT I S NOT APPROPRIATED BY THE ASSESSEE TOWARDS THE PURCHASE OR CONSTRUCTION O F NEW ASSET BEFORE THE DATE OF FURNISHING THE RETURN U/S 139 SUB SECTI ON 139(4) IS IN FACT, A PROVISO TO SUB SECTION (1) AND PROVIDES FOR EXTENSI ON OF PERIOD OF DUE DATE OF FILING THE RETURN IN CERTAIN CIRCUMSTANCES. ONLY IF SUCH AMOUNT IS NOT APPROPRIATED BY ASSESSEE TOWARDS THE PURCHASE O R CONSTRUCTION OF NEW ASSET BEFORE THE DATE OF FURNISHING OF RETURN U /S 139(4) THE EXEMPTION U/S 54 CAN NOT BE ALLOWED. THEREFORE THE ORDER PASSED BY CIT(A) NEEDS TO BE REVERSED AND THE EXEMPTION U/S 5 4 CLAIMED BY THE I TA NO. 601(ASR)/2015 ASST. YEAR: 2011-12 7 ASSESSEE NEEDS TO BE ALLOWED SINCE THE ASSESSEE HAS INVESTED IN THE PURCHASE OF HOUSE PROPERTY MUCH MORE THAN THE AMOUN T OF CAPITAL GAIN AS IS EVIDENT FROM THE DETAIL OF PAYMENTS MADE BY T HE ASSESSEE FOR THE PURCHASE OF NEW HOUSE GIVEN IN THE ASSESSMENT ORDER 6. ON THE CONTRARY, THE LD. DR SUBMITTED THAT BOTH THE AUTHORITIES BELOW, PASSED WELL REASONED ORDER WHILE CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, IT DOES NOT REQUIRES TO INTERFERE D WITH AND LIABLE TO BE UPHELD. 7. WE HAVE GONE THROUGH WITH THE FACTS AND CIRCUMSTA NCES OF THE CASE AND ORDER PASSED BY THE AUTHORITIES BELOW AS IN THE INSTANT CASE, THE APPELLANT CLAIMED EXEMPTION U/S 54 IN RESPECT OF A LONG TERM CAPITAL GAIN AMOUNTING TO RS.21,75,800/- ON THE GROUN D HE HAS SOLD HIS ONE HALF SHARE IN RESIDENTIAL FLAT FOR RS.52,50,00 0/- AND LONG TERM CAPITAL GAIN ON THE SAME AMOUNTING TO RS.21,75,800/-. THE ASSESSEE CLAIMED THE EXEMPTION ON THE PRETEXT THAT HE HAS INVE STED THE SAID AMOUNT UP TO 31 ST MARCH, 2012 I.E. BEFORE THE DUE DATE OF FILING OF RETURN U/S 139. THE CIT(A), HOWEVER, CONFIRMED THE O RDER OF AO TO THE EXTENT THAT THE ASSESSEE HAD INVESTED ONLY RS.6,39,500/- UPTO 30 TH SEP.2011 WHICH WAS THE DUE DATE OF FILING OF RETURN U /S 139(1). THE LD. CIT(A) ALTHOUGH ALLOWED EXEMPTION OF RS.6,39,50 0/- BEING THE AMOUNT INVESTED UPTO 30 TH SEP.2011. AS PER PROVISIONS OF SEC.139(4) THE RETURN COULD HAVE FILED UPTO 31 ST MARCH,2012 AND IN THE INSTANT CASE, THE ASSESSEE HAD INVESTED RS.86,59,347/- UPTO 31 ST MARCH,2012 FOR CONSTRUCTION OF NEW HOUSE PROPERTY. 7.1 JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V/S M/S. JAGRITI AGGARWAL, [2011] 339 ITR 610 (P&H), OBSERVED AND HELD AS UNDER:- '6. SEC. 54 OF THE ACT CONTEMPLATES THAT THE CAPITAL GAIN ARISES FROM THE TRANSFER OF A LONG-TERM I TA NO. 601(ASR)/2015 ASST. YEAR: 2011-12 8 CAPITAL ASSET, BUT IF THE ASSESSEE WITHIN A PERIOD OF ONE YEAR BEFORE OR TWO YEARS AFTER THE DATE ON WHICH THE TRANSFER TOOK PLACE PURCHASES RESIDENTIAL HOUSE, THEN INSTEAD OF THE CAPITAL GAIN, THE INCOME WOULD BE CHARGED IN TERMS OF PROVISIONS OF SUB-S. (1) OF S. 54. AS PER SUB-S. (2 ), IF THE AMOUNT OF CAPITAL GAINS IS NOT APPROPRIATED BY THE ASSESSEE TOWARDS THE PURCHASE OF NEW ASSET WITHIN ONE YEAR BEFORE THE DATE 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 BEFORE THE DATE OF FURNISHING THE RETURN OF INCOME UNDER S. 139, THE AMOUNT SHALL BE DEPOSITED BY HIM BEFORE FURNISHING SUCH RETURN NOT LATER THAN DUE DATE APPLICABLE IN THE CASE OF ASSESSEE FOR FURNISHING THE RETURN OF INCOME UNDER SUB-S. (1) OF S. 139 IN AN ACCOUNT IN ANY SUCH BANK OR INSTITUTION AS MAY BE SPECIFIED. RELEVANT SUB-S. (2) OF S. 54 OF THE ACT READS AS UNDER:- XXX XXX XXX 7. THE QUESTION WHICH ARISES IS; WHETHER THE RETUR N FILED BY THE ASSESSEE BEFORE THE EXPIRY OF THE YEAR ENDING WITH THE ASSESSMENT YEAR IS VALID UNDER S. 139(4) OF THE ACT? 8. LEARNED COUNSEL FOR THE REVENUE HAS ARGUED THAT THE ASSESSEE WAS REQUIRED TO FILE RETURN UNDER SUB-S. (1) OF S. 139 OF THE ACT IN TERMS OF SUB-S. (2) MR. GOPE M. ROCHLANI OF S. 54 OF THE ACT. IT IS CONTENDED THAT SUB-S. (4) IS NOT APPLICABLE IN RESPECT OF THE ASSESSEE SO AS TO AVOID PAYMENT OF LONG-TERM CAPITAL GAIN. 9. ON THE OTHER HAND, LEARNED COUNSEL FOR THE RESPONDENT RELIES UPON A DIVISION BENCH JUDGMENT OF KARNATAKA HIGH COURT IN FATHIMA BAL VS. ITO (2009) 32 DTR (KAR) 243 WHERE IN SOMEWHAT SIMILAR CIRCUMSTANCES, IT HAS BEEN HELD THAT TIME- LIMIT FOR DEPOSIT UNDER SCHEME OR UTILISATION CAN BE MADE BEFORE THE DUE DATE FOR FILING OF RETURN UNDER S. 139(4) OF THE ACT. LEARNE D COUNSEL FOR THE RESPONDENT ALSO RELIES UPON A DIVISION BENCH JUDGMENT OF GAUHATI HIGH COURT IN CIT VS. RAJESH KUMAR JALAN (2006) 206. CTR (GAU) 361 (2006) 286 ITR 274 (GAU). I TA NO. 601(ASR)/2015 ASST. YEAR: 2011-12 9 10. HAVING HEARD LEARNED COUNSEL FOR THE PARTIES, WE ARE 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 FIXES THE DIFFERENT DATES FOR FILING THE RETURNS FOR DIFFERENT ASSESSEE . IN THE CASE OF ASSESSEE AS THE RESPONDENT, IT IS 31ST DAY OF JULY OF THE ASSESSMENT YEAR IN TERMS OF CI. (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:- 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 TH E ASSESSMENT YEAR, THE ASSESSEE CAN FILE RETURN BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT YEAR.' 7.2 FURTHER THE JURISDICTIONAL HIGH COURT IN ANOTHER CASE TITLED AS CIT V/S JAGTAR SINGH CHAWLA, PASSED IN INCOME TAX APPEAL NO.71 OF 2012, VIDE JUDGMENT DATED 20TH MARCH 2013 O BSERVED AND HELD AS UNDER:- 'THE PROVISIONS OF SECTION 54F(4) OF THE ACT ARE PARI-MATERIA WITH SECTION 54(2) OF THE ACT. SECTION 54 DEALS WITH THE PROFIT ON SALE OF A RESIDENTIAL HOUS E, WHEREAS SECTION 54F DEALS WITH THE TRANSFER OF ANY LONG TERM CAPITAL ASSETS NOT BEING A RESIDENTIAL HOUSE. A DIVISION BENCH OF THE GAUHATI HIGH COURT IN A CASE REPORTED AS COMMISSIONER OF INCOME TAX V. RAJE SH KUMAR JALAN (2006) 286 ITR 274, HELD THAT ONLY SECT ION 139 OF THE ACT IS MENTIONED IN SECTION 54(2) OF THE ACT IN THE CONTEXT THAT THE UNUTILIZED PORTION OF THE CAPI TAL GAIN ON THE SALE OF PROPERTY USED FOR RESIDENCE SHOULD B E DEPOSITED BEFORE THE DATE OF FURNISHING THE RETURN OF THE INCOME TAX UNDER SECTION 139 OF THE ACT AND THAT IT WOULD INCLUDE EXTENDED PERIOD TO FILE RETURN IN TER MS OF SUB SECTION 4 OF SECTION 139 OF THE ACT. IT WAS HEL D AS UNDER:- 'FROM A PLAIN READING OF SUB-SECTION (2) OF SECTION 54 OF THE INCOME-TAX ACT, 1961, IT IS CLEAR THAT ON LY SECTION 139 OF THE INCOME-TAX ACT, 1961, IS MENTION ED IN I TA NO. 601(ASR)/2015 ASST. YEAR: 2011-12 10 SECTION 54(2) IN THE CONTEXT THAT THE UNUTILIZED PO RTION OF THE CAPITAL GAIN ON THE SALE OF PROPERTY USED FOR RESIDENCE SHOULD BE DEPOSITED BEFORE THE DATE OF FURNISHING THE RETURN OF THE INCOME-TAX UNDER SECTI ON 139 OF THE INCOME-TAX ACT. SECTION 139 OF THE INCOM E TAX ACT, 1961, CANNOT BE MEANT ONLY SECTION 139(1), BUT IT MEANS ALL SUB-SECTIONS OF SECTION 139 OF THE INCOME -TAX ACT, 1961. UNDER SUB- SECTION (4) OF SECTION 139 OF THE INCOME-TAX ACT ANY PERSON WHO HAS NOT FURNISHED A RETURN WITHIN THE TIME ALLOWED TO HIM UNDER SUB-SEC TION (1) OF SECTION 142 MAY FURNISH THE RETURN FOR ANY PREVIOUS YEAR AT ANY TIME BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT YEAR OR BEF ORE THE COMPLETION OF THE ASSESSMENT YEAR WHICHEVER IS EARLIER.' THE SAID JUDGMENT WAS RELIED UPON BY A DIVISION BENCH OF THE KARNATAKA HIGH COURT IN FATHIMA BAI V. ITO, ITA NO.435 OF 2004 DECIDED ON 17TH OCTOBER 200 8, WHEREIN IT WAS HELD TO THE FOLLOWING EFFECT:- '11. THE EXTENDED DUE DATE UNDER SECTION 139(4) WOULD BE 31.3.1990. THE ASSESSEE DID NOT FILE THE RETURN WITHIN THE EXTENDED DUE DATE, BUT FILED THE RETURN ON 27.2.2000. HOWEVER, THE ASSESSEE HAD UTILIZED THE ENTIRE CAPITAL GAINS BY PURCHASE OF A HOUSE PROPERTY WITHIN THE STIPULATED PERIOD OF SECTION 54(2) I.E., BEFORE THE EXTENDED DUE DATE FOR RETURN UNDER SECTION 139. THE ASSESSEE TECHNICALLY MAY HAVE DEFAULTED IN NOT FILING THE RETURN UNDER SECTION 139(4). BUT, HOWEVER, UTILIZED THE CAPITAL GAINS FOR PURCHASE OF PROPERTY BEFORE THE EXTENDED DUE DATE UNDER SECTION 139(4). THE CONTENTION OF THE REVENUE THAT THE DEPOSIT IN THE SCHEME SHOULD HAVE BEEN MADE BEFORE THE INITIAL DUE DATE AND NOT THE EXTENDED DUE DATE IS AN UNTENABLE CONTENTION.' A DIVISION BENCH OF THIS COURT IN WHICH ONE OF US (HEMANT GUPTA, J.) WAS A MEMBER, HAD AN OCCASION TO CONSIDER THE PROVISIONS OF SECTION 54(2) OF THE ACT , WHEREIN IT HAS BEEN HELD THAT SUBSECTION (4) OF SEC TION 139 OF THE ACT IS IN FACT A PROVISO TO SECTION 139( 1) OF THE ACT. THEREFORE, SINCE THE ASSESSEE HAS INVESTED THE I TA NO. 601(ASR)/2015 ASST. YEAR: 2011-12 11 SALE PROCEEDS IN A RESIDENTIAL HOUSE WITHIN THE EXTENDED PERIOD OF LIMITATION, THE CAPITAL GAIN IS NOT PAYABLE. THE JUDGMENTS IN RAJESH KUMAR JALAN'S CASE AND FATHIMA BAI'S CASE (SUPRA) WERE REFERRED TO. IT HAS BEEN HELD AS UNDER:- 'HAVING HEARD LEARNED COUNSEL FOR THE PARTIES, WE ARE OF THE OPINION THAT SUB- SECTION (4) OF SECTION 139 OF THE ACT IS, IN ACT, A PROVISO TO SUB-SECTION (1) OF SECTION 139 OF THE ACT. SECTION 139 OF THE ACT FIXES THE DI FFERENT DATES FOR FILING THE RETURNS FOR DIFFERENT ASSESSES . IN THE CASE OF ASSESSEE AS THE RESPONDENT, IT IS 31ST DAY OF JULY, OF THE ASSESSMENT YEAR IN TERMS OF CLAUSE (C) OF THE EXPLANATION 2 TO SUB-SECTION 1 OF SECTION 139 O F THE ACT, WHEREAS SUB-SECTION (4) OF SECTION 139 PROVIDE S FOR EXTENSION IN PERIOD OF DUE DATE IN CERTAIN CIRCUMSTANCES.' 7.3 FROM THE PROPOSITIONS LAID DOWN BY THE AFORESAID DECISIO NS, IT IS ABSOLUTELY CLEAR THAT PROVISIONS OF SECTION 139(4) IS ACTUA LLY THE EXTENSION OF THE DUE DATE OF SECTION 139(1) AND, THERE FORE, THE DUE DATE FOR FILING OF THE RETURN OF INCOME CAN ALSO B E RECKONED WITH THE DATE MENTIONED IN SECTION 139(4). 7.4. IN OUR CONSIDERED OPINION, ONCE THE LEGISLATURE HA S NOT SPECIFIED THE 'DUE DATE' AS PROVIDED IN SECTION 139(1) IN EXPLAN ATION 5A, THEN BY IMPLICATION, IT HAS TO BE TAKEN AS THE DATE EX TENDED UNDER SECTION 139(4). AS THE HONBLE COURT DECIDED THAT IF THE ASSESSEE HAS APPROPRIATED TOWARDS A PURCHASE OR CONSTRUCTION OF NEW ASSETS BEFORE THE DATE OF FURNISHING THE RETURN U/ S 139 I.E. UPTO THE CLOSE OF THE YEAR, THE EXEMPTION U/S 54 CANNO T BE DENIED TO THE APPELLANT SINCE SUB-SECTION 139(4) IS IN F ACT, A PROVISO TO SUB-SECTION (1) AND PROVIDES FOR EXTENSION TO PERIOD OF DUE DATE OF FILING THE RETURN OF THE CLOSE OF THE YEA R HENCE IN VIEW OF THE ABOVE, WE HOLD THAT THE ASSESSEE GETS THE B ENEFIT OF EXEMPTION UNDER SECTION 54 OF THE ACT. I TA NO. 601(ASR)/2015 ASST. YEAR: 2011-12 12 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 05.0 5.2017. SD/- SD/- (T. S. KAPOOR) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 05.05.2017. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER