VIRENDRA SINGH, Alwar V. ITO, Alwar

ITA 909/JPR/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5456 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 30-12-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJENDRA SINGH JCIT DHK
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Fair market value; Revised return
• Section: 54B; 50C; 54F; 139(5); 54; 15; 139

Judgement Text

1 VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB ] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH FOE FLAG ;KN O] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI VIKRAM SINGH YA DAV, AM VK;DJ VIHY LA-@ ITA NO. 909/JP/14 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11 SHRI VIRENDRA SINGH, CHAJJU SINGH KI GALI, OUTSIDE MALAKHERA GATE, ALWAR CUKE VS. INCOME TAX OFFICER, WARD 2(1), ALWAR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. CXYPS 1629 G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 908/JP/14 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11 SHRI SURENDRA SINGH, CHAJJU SINGH KI GALI, OUTSIDE MALAKHERA GATE, ALWAR CUKE VS. INCOME TAX OFFICER, WARD 2(1), ALWAR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. CXHPS 2840C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (C.A.) JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJENDRA SINGH (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 17/12 /2015 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 17/02/2016 VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. 2 THESE ARE TWO COMMON APPEALS FILED BY THE RESPECTIV E ASSESSEES AGAINST THE ORDER OF CIT(A), ALWAR OF EVEN DATE 27. 10.2014 WHEREIN THE ASSESSEES HAVE TAKEN THE FOLLOWING GROUNDS OF APPEA L: ITA NO. 909/JP/13 (1) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF THE LD. AO IN NO T ALLOWING THE CLAIM OF DEDUCTION U/S 54B OF THE I.T. ACT, 1961 AT RS. 1,0 9,40,000/-. THE ACTION OF THE CIT(A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY FOLLOWING TH E RELIEF. (2) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF THE LD. AO IN MA KING ADDITION OF RS. 11,70,343/- U/S 50C BY ADOPTING THE DLC RATE. THE ACTION OF THE LD. CIT(A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAIN ST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY DELETING THE SAID A DDITION OF RS. 11,70,343/-. (3) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF THE LD. AO IN MA KING ADDITION OF RS. 37,000/- BY REJECTING THE CLAIM OF INDEXATION U/S 48 OF THE I.T. ACT, 1961. THE ACTION OF THE LD. CIT(A) IS ILLEGAL, UNJUSTIFIED , ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY DELETING THE SAID ADDITION OF RS. 37,000/-. ITA NO. 908/JP/13 (1) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF THE LD. AO IN NO T ALLOWING THE CLAIM OF DEDUCTION U/S 54B OF THE I.T. ACT, 1961 AT RS. 87, 25,000/-. THE ACTION OF THE CIT(A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AG AINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY FOLLOWING TH E RELIEF. (2) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF THE LD. AO IN MA KING ADDITION OF RS. 5,67,595/- U/S 50C BY ADOPTING THE DLC RATE. THE A CTION OF THE LD. CIT(A) 3 IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY DELETING THE SAID ADDITION OF RS. 5,67,595/-. 2. FIRST, WE TAKE UP APPEAL IN CASE OF SHRI VIRENDR A SINGH WHEREIN THE ASSESSEE HAS FILED AN APPLICATION FOR MODIFICATION OF GROUND NO.1 AS UNDER: IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF THE LD. AO IN NO T ALLOWING THE CLAIM OF DEDUCTION U/S 54B OF THE I.T. ACT, 1961 AT RS. 1,0 9,40,000/- AND U/S 54F AT RS. 22,69,000/-. THE ACTION OF THE CIT(A) IS ILLEG AL, UNJUSTIFIED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE B E GRANTED BY FOLLOWING THE RELIEF. 2.1 GIVEN THAT ALL THE RELEVANT FACTS ARE ON RECORD AND THE ASSESSEE HAS TAKEN SIMILAR GROUNDS BEFORE THE LD. CIT(A), THE MO DIFIED GROUND WHERE THE ASSESSEE HAS RAISED AN ADDITIONAL LEGAL GROUND IN R ESPECT OF DEDUCTION U/S 54F OF THE IT ACT, 1961 IS ALLOWED. 2.2 THE RELEVANT FACTS AS APPARENT FROM THE RECORDS ARE AS UNDER: THE ASSESSEE HAD FILED ITS ORIGINAL RETURN ON 30.03 .2012 DECLARING TOTAL INCOME OF RS. 2,62,500/-. DURING THE YEAR, ASSESSE E SOLD OUT CERTAIN PORTION OF HIS AGRICULTURAL LAND ON VARIOUS DATES FOR CONSI DERATION OF RS.1,26,42,892/-. HOWEVER, FOR STAMP DUTY PURPOSE ITS VALUE WAS DETERMINED AT RS. 1,38,13,235/-. IN THE ORIGINAL RE TURN FILED ON 30.03.2012, THE ASSESSEE DECLARED LONG TERM CAPITAL GAIN ON SAL E OF THE ABOVE AGRICULTURAL LAND AT RS. NIL AFTER CLAIMING DEDUCTI ON U/S 54F AND 54B AS FOLLOWS: SALES CONSIDERATION OF AGRICULTURAL LAND RS. 1,26,42,892/- LESS: COST OF IMPROVEMENT RS. 35,500/- EXPENSES INCURRED RS. 1,500/- RS. 37,000/- NET CONSIDERATION RS. 1,26,42,892 /- 4 LESS: DEDUCTION U/S 54B RS . 1,09,40,000/- DEDUCTION U/S 54F RS. 22,69,000/- RS. 1,32,09,000/- LONG TERM CAPITAL GAIN NIL SUBSEQUENTLY, THE ASSESSEE FILED A REVISED RETURN O N 20.07.2012 AT TOTAL INCOME OF RS.7,29,735/- WHEREIN THE CAPITAL GAIN WA S COMPUTED WITH REFERENCE TO THE VALUE ADOPTED BY STAMP AUTHORITIES AT RS.1,37,13,235/- IN ACCORDANCE WITH THE PROVISIONS OF SECTION 50C. THE DEDUCTION U/S 54B WAS CLAIMED ON PURCHASE OF AN AGRICULTURAL LAND BEARING KHASRA NO. 682/1938 SITUATED AT VILLAGE KHO HRA MALAWALI, TEHSIL LAXMANGARH, DISTRICT ALWAR FROM SHRI JAGDISH SINGH ON 10.07.2011 FOR RS. 1,09,40,000/-. THE PAYMENT OF RS. 50 LACS WAS MADE AT THE TIME OF AGREEMENT AND BALANCE PAYMENT OF RS. 59,40,000/- WA S MADE ON 16.08.2011. THE DEDUCTION U/S 54F IS CLAIMED ON PURCHASE OF HOU SE LOCATED AT PLOT NO. 101, CHETAN ENCLAVE, OLD JAIPUR ROAD, ALWAR ON 06 .02.2012 FOR PURCHASE CONSIDERATION OF RS.21,50,000/- PLUS STAMP DUTY AND EXPENSES OF RS. 1,19,000/- TOTALING TO RS. 22,69,000/-. THE AO DISALLOWED THE ASSESSEES CLAIM OF DEDUCTION U/S 54B AND 54F BY HOLDING THAT THE ASSESSEE HAS NOT DEPOSITED THE AMO UNT OF SALES CONSIDERATION IN CAPITAL GAIN ACCOUNT SCHEME AND HA S NOT PURCHASED THE AGRICULTURAL LAND/HOUSE BEFORE THE DUE DATE OF FILI NG OF ORIGINAL RETURN I.E. 31.07.2010. 2.3 BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R IN APPEAL BEFORE LD. CIT(A) WHERE IT CONTENDED THAT THE PROVISIONS OF I T ACT DO NOT SPECIFICALLY PROVIDE FOR MAKING AN INVESTMENT IN THE PURCHASE O F NEW ASSET BEFORE THE DUE DATE OF FURNISHING OF RETURN OF INCOME. THE ASSESEE HAS COMPLIED WITH THE PROVISIONS OF LAW BY PURCHASING THE AGRICULTURA L LAND/HOUSE WITHIN 2 YEARS FROM THE DATE OF THE TRANSFER AND ALSO FURNIS HED THE RETURN OF INCOME WITHIN THE TIME PROVIDED U/ 139(4) OF THE IT ACT. THEREFORE, THERE IS NO 5 REQUIREMENT IN THE LAW TO DEPOSIT THE AMOUNT IN CAP ITAL ACCOUNT SCHEME BEFORE THE DUE DATE PRESCRIBED U/S 139(1). THE LD. CIT(A) HOWEVER CONFIRMED THE DENIAL OF DEDU CTION U/S 54B OF THE ACT AND THE RELEVANT FINDINGS ARE REPRODUCED AS UND ER: I HAVE CAREFULLY CONSIDERED THE MATERIAL PLACED ON RECORD AND FIND THAT THERE IS NO DISPUTE THAT THE SALE CONSIDERATION REC EIVED BY THE APPELLANT ON SALE OF AGRICULTURAL LAND HAS NOT BEEN DEPOSITED IN THE PRESCRIBED BANK ACCOUNT UNDER THE CAPITAL GAINS ACCOUNT SCHEME . FURTHER, AS REGARDS THE ISSUE OF INVESTMENT OF THE SALE CONSIDE RATION FOR PURCHASE OF NEW PROPERTY IS CONCERNED, IT WOULD BE RELEVANT TO LOOK AT THE FOLLOWING FACTS:- (A) DATE OF SALE OF CAPITAL ASSET (AGRICULTURAL LAND) B ETWEEN 17.08.2009 TO 10.03.2010. (B) SALE CONSIDERATION RECEIVED RS. 1,26,42,892/- (C) DLC VALUE OF AGRICULTURAL LAND SOLD RS. 1,38,13,235 /- (D) DUE DATE OF FILING OF RETURN U/S 139(1) -31.07.2010 (E) PURCHASE OF NEW AGRICULTURAL LAND 10.07.2011 (F) PURCHASE CONSIDERATION FOR NEW AGRICULTURAL LAND R S. 1,09,40,000/- (G) ACTUAL DATE OF FILING OF RETURN U/S 139(4) 30. 03.2012 IT IS CLEAR FROM THE ABOVE THAT THE APPELLANT HAS C LEARLY FAILED TO PURCHASE THE NEW CAPITAL ASSET I.E. AGRICULTURAL LA ND WITHIN THE TIME LIMIT AS PROVIDED UNDER THE PROVISIONS OF SECTION 54B OF THE IT ACT. IT MAY BE SEEN FROM THE ABOVE THAT THE PROVISIONS O F SUB-SECTION 2 OF SECTION 54B OF THE IT ACT PROVIDE THAT THE CAPITAL GAIN WHICH IS NOT UTILIZED BY THE ASSESSEE FOR THE PURCHASE OF NEW AS SET BEFORE THE DATE OF FURNISHING OF RETURN OF INCOME U/S 139, SHALL BE DE POSITED BY HIM BEFORE FURNISHING SUCH RETURN IN A SEPARATE BANK ACCOUNT I N ACCORDANCE WITH THE CAPITAL GAIN ACCOUNTS SCHEME. IT HAS BEEN FURTHER CLARIFIED IN THE 6 PROVISION ITSELF THAT DATE OF FURNISHING OF RETURN SHALL BE TAKEN AS UNDER SUB-SECTION 1 OF SECTION 139 OF THE IT ACT. THE US E OF WORDS SHALL BE LEAVES NO SCOPE FOR DISCRETION ON THE PART OF THE ASSESSEE AND IS TO BE TREATED AS MANDATORY CONDITION FOR COMPLIANCE. TH E APPELLANT HAS CLEARLY FAILED TO PURCHASE THE NEW ASSET BEFORE THE DUE DATE I.E. 31.07.2010 (FOR A.Y. 2010-11, IN THE CASE OF AN IND IVIDUAL) AND HAS ALSO FAILED TO DEPOSIT THE AMOUNT OF CAPITAL GAIN IN A S EPARATE BANK ACCOUNT AS PROVIDED UNDER CAPITAL GAINS ACCOUNT SCHEME. 2.4 DURING THE COURSE OF HEARING, THE LD. AR HAS SUBMIT TED THAT: THE SUB-SECTION (2) OF SECTION 54B READS AS UNDER: THE AMOUNT OF THE CAPITAL GAIN WHICH IS NOT UTILIS ED BY THE ASSESSEE FOR THE PURCHASE OF NEW ASSET BEFORE THE DATE OF F URNISHING THE RETURN OF INCOME UNDER SECTION 139, SHALL BE DEPOSITED BY HIM BEFORE FURNISHING SUCH RETURN (SUCH DEPOSIT BEING MADE IN ANY CASE NO T LATER THAN THE DUE DATE APPLICABLE IN THE CASE OF THE ASSESSEE FOR FUR NISHING THE RETURN OF INCOME UNDER SUB-SECTION (1) OF SECTION 139) IN AN AMOUNT OF ANY SUCH BANK OR INSTITUTION AS MAY BE SPECIFIED IN, AND UT ILIZED IN ACCORDANCE WITH, ANY SCHEME WHICH THE CENTRAL GOVERNMENT MAY, BY N OTIFICATION IN THE OFFICIAL GAZETTE, FRAME IN THIS BEHALF AND SUCH RET URN SHALL BE ACCOMPANIED BY PROOF OF SUCH DEPOSIT, AND, FOR THE PURPOSES OF SUB-SECTION (1), THE AMOUNT, IF ANY, ALREADY UTILIZED BY THE ASSESSEE FO R THE PURCHASE OF THE NEW ASSET TOGETHER WITH THE AMOUNT SO DEPOSITED SHA LL BE DEEMED TO BE THE COST OF THE NEW ASSET. FROM THE ABOVE, IT CAN BE NOTED THAT SUB-SECTION (1 ) OF SECTION 139 IS MENTIONED ONLY WITH REGARD TO THE TIME LIMIT FOR DE POSIT OF THE FUNDS IN CAPITAL SCHEME. THERE IS NO MENTION OF ANY SUCH SU B-SECTION OF SECTION 139 WITH REGARD TO THE TIME LIMIT FOR UTILIZATION OF TH E FUNDS FOR THE PURCHASE OF THE NEW ASSET. HENCE, IT CANNOT BE INTERPRETED THA T SECTION 139 MENTIONED IN THE SECTION IS TO BE READ AS SECTION 139(1). SE CTION 139 WOULD INCLUDE SECTION 139(4) AND THEREFORE WHERE AGRICULTURAL LAN D/HOUSE PROPERTY IS PURCHASED BEFORE THE TIME LIMIT PRESCRIBED U/S 139( 4), ASSESSEE WOULD BE ENTITLED FOR DEDUCTION AND HE IS NOT REQUIRED TO DE POSIT THE SAME IN THE CAPITAL GAIN ACCOUNT SCHEME. IN THE PRESENT CASE, ASSESSEE FILED THE RETURN U/S 139(4) ON 30.03.2012. INVESTMENT IN PURCHASE O F AGRICULTURAL 7 LAND/HOUSE PROPERTY MADE ON 10.07.2011 IS WITHIN TH E TIME PRESCRIBED U/S 139(4). HENCE, ASSESSEE IS ENTITLED TO DEDUCTION U /S 54B. FOR THIS PURPOSE, RELIANCE IS PLACED ON THE FOLLOWING CASES: NANDLAL SHAMRA VS. ITO (2015) 122 DTR 404 (JPR )(TR B.) CIT VS. JAGTAR SINGH CHAWLA (2013) 87 DTR 217 (P&H) (HC) CIT VS. JAGRITI AGGARWAL (2014) 64 DTR 333 (P&H) (H C) 339 ITR 610 FATHIMA BAI VS. ITO, (2009) 32 DTR 243 (KAR) (HC) CIT VS. SMT.VRINDA P. ISSAC (2011) 64DTR 0376 (KAR, ) (HC) NIPUN MEHROTRA VS. ACIT (2008) 110 ITD 520 (BNG.) ( TRIB.) 2.5 THE LD. DR ARGUED THE MATTER AT LENGTH AND RELI ED ON THE ORDER OF THE CIT(A). 2.6 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN ORDER TO EXAMINE THE MATTER UNDER CONSIDERATION, IT WOULD BE RELEVANT TO LOOK AT THE PROVISIONS OF SECT ION 54B OF THE ACT WHICH HAVE A BEARING ON THE SUBJECT WHICH IS REPRODUCED AS UNDER: SECTION 54B: CAPITAL GAIN ON TRANSFER OF LAND USED FOR AGRICULTURAL PURPOSES NOT TO BE CHARGED IN CERTAIN CASES:(1) SUBJECT TO TH E PROVISIONS OF SUB- SECTION(2), WHERE THE CAPITAL GAIN ARISES FROM THE TRANSFER OF A CAPITAL ASSET BEING LAND WHICH, IN THE TWO YEARS IMMEDIATELY PREC EDING THE DATE ON WHICH, IN THE TWO YEARS IMMEDIATELY PRECEDING THE D ATE ON WHICH THE TRANSFER TOOK PLACE, WAS BEING USED BY THE ASSESSE E, OR A PARENT OF HIS FOR AGRICULTURAL PURPOSES (HEREINAFTER REFERRED TO AS T HE ORIGINAL ASSET), AND THE ASSESSEE HAS, WITHIN A PERIOD OF TWO YEARS AFTER TH AT DATE, PURCHASED ANY OTHER LAND FOR BEING USED FOR AGRICULTURAL PURPOSES , THEN, INSTEAD OF THE CAPITAL GAIN BEING CHARGED TO INCOME TAX AS INCOME OF THE PREVIOUS YEAR IN WHICH THE TRANSFER TOOK PLACE, IT SHALL BE DEALT WI TH 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 T HE COST OF THE LAND SO PURCHASED (HEREINAFTER REFERRED TO AS THE NEW ASSET ), THE DIFFERENCE 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 PREVIOUS YEAR; AND FOR THE PURPOSE OF COMPUTING IN RESPECT OF THE NEW ASSET ANY CAPITAL 8 GAIN ARISING FROM ITS TRANSFER WITHIN A PERIOD OF T HREE YEARS OF ITS PURCHASE, 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 BE CHARGE D UNDER SECTION 45; AND FOR THE PURPOSE OF COMPUTING IN RESPECT OF THE NEW ASSET ANY CAPITAL GAIN ARISING FROM ITS TRANSFER WITHIN A PERIOD OF THREE YEARS OF ITS PURCHASE, THE COST SHALL BE REDUCED, BY THE AMOUNT OF THE CAPITAL GAIN, (2) THE AMOUNT OF THE CAPITAL GAIN WHICH IS NOT UTI LIZED BY THE ASSESSEE FOR THE PURCHASE OF THE NEW ASSET BEFORE THE DATE O F FURNISHING THE RETURN OF INCOME UNDER SECTION 139, SHALL BE DEPOSITED BY HI M BEFORE FURNISHING SUCH RETURN DEPOSIT BEING MADE IN ANY CASE NOT LATER T HAN THE DUE DATE APPLICABLE IN THE CASE OF THE ASSESSEE FOR FURNISHI NG THE RETURN OF INCOME UNDER SUB SECTION (1) OF SECTION 139 IN AN ACCOUNT IN ANY SUCH BANK OR INSTITUTION AS MAY BE SPECIFIED IN, AND UTILIZED IN ACCORDANCE WITH, ANY SCHEME 19 WHICH THE CENTRAL GOVERNMENT MAY, BY NOT IFICATION IN THE OFFICIAL GAZETTE. FRAME IN THIS BEHALF AND SUCH RET URN 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 F OR THE PURCHASE NEW ASSET TOGETHER WITH THE AMOUNT SO DEPOSITED SHALL BE DEEM ED TO BE THE COST OF THE NEW ASSET: PROVIDED THAT IF THE AMOUNT DEPOSITED UNDER THIS S UB-SECTION IS NOT UTILIZED WHOLLY OR PARTLY FOR THE PURCHASE OF THE NEW ASSET WITHIN THE PERIOD SPECIFIED IN SUB-SECTION (1), THEN (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 TWO YEARS FROM THE DATE OF THE TRANSFER OF THE ORIGINAL ASSET EXPIRES; AND (II) THE ASESSEE SHALL BE ENTITLED TO WITHDRAW SU CH AMOUNT IN ACCORDANCE WITH THE SCHEME AFORESAID. 2.7 THE PROVISIONS OF SUBSECTION 2 HAVE BEEN INTROD UCED BY THE FINANCE ACT 1987. THE CBDT CIRCULAR NO. 495 DATED 27.09.198 7 CONTAINS THE EXPLANATORY NOTES ON THE PROVISIONS RELATING TO DIR ECT TAXES AS INTRODUCED 9 BY THE FINANCE ACT, 1987. THE RELEVANT CLAUSES OF C BDT CIRCULAR NO. 495 ARE REPRODUCED AS UNDER: 26.1 UNDER THE EXISTING PROVISIONS OF SECTION 54, 54B, 54D AND 54F, LONG TERM CAPITAL GAINS ARISING FROM THE TRANSFER OF AN Y IMMOVABLE PROPERTY USED FOR RESIDENCE, LAND USED FOR AGRICULTURAL PUR POSES, COMPULSORY ACQUISITION OF LANDS AND BUILDINGS AND OTHER CAPIT AL ASSETS ARE EXEMPT FROM INCOME TAX IF SUCH GAINS ARE REINVESTED IN NEW ASS ETS WITHIN THE TIME ALLOWED FOR THE PURPOSE. THE ORIGINAL ASSESSMENT NEEDS RECTIFICATION WHENEVER THE TAXPAYER FAILS TO ACQUIRE THE CORRESPO NDING NEW ASSET. 26.2 WITH A VIEW TO DISPENSE WITH RECTIFICATION OF ASSESSMENTS, THE AMENDMENTS MADE TO SECTION 54, 54B, 54D AND 54F PRO VIDE FOR A NEW SCHEME FOR DEPOSIT OF AMOUNTS MEANT FOR REINVESTMEN T IN THE NEW ASSET. AFTER THE AFOREMENTIONED AMENDMENTS, WHERE THE AM OUNT OF CAPITAL GAINS OR THE NET CONSIDERATION, AS THE CASE MAY BE, IS NOT APPROPRIATED OR UTILIZED BY THE TAXPAYER FOR ACQUISITION OF THE NEW ASSET BEFORE THE DATE FOR FURNISHING THE RETURN OF INCOME, IT SHALL BE DEPOS ITED BY HIM ON OR BEFORE THE DUE DATE OF FURNISHING THE RETURN OF INCOME , UNDER SECTION 139(1) IN AN ACCOUNT WITH THE BANK OR INSTITUTION AND UTILIZED IN ACCORDANCE WITH A SCHEME FRAMED BY THE CENTRAL GOVERNMENT IN THIS REG ARD. THE AMOUNT ALREADY UTILIZED TOGETHER WITH THE AMOUNTS OF DEPOS IT SHALL BE DEEMED TO BE THE AMOUNT UTILIZED FOR THE ACQUISITION OF THE NEW ASSET. IF THE AMOUNT DEPOSITED IS NOT UTILIZED FULLY FOR ACQUIRING TH E NEW ASSET WITHIN THE PERIOD STIPULATED, THE CAPITAL GAIN RELATABLE TO THE UNU TILIZED AMOUNT SHALL BE TREATED AS THE CAPITAL GAIN OF THE PREVIOUS YEAR I N WHICH THE PERIOD SPECIFIED IN THESE PROVISIONS EXPIRES. IN SUCH CAS ES, THE THRESHOLD DEDUCTION OF TEN THOUSAND RUPEES AS WELL AS THE DEDUCTION UND ER SECTION 53 WILL NOT BE ADMISSIBLE. FURTHER, THE TAXPAYER SHALL BE ENTITLE D TO WITHDRAW SUCH AMOUNT IN ACCORDANCE WITH THIS SCHEME. THIS SCHEME WILL BE APPLICABLE IN RELATION TO THE NEW SECTION 54G ALSO. 2.8 A COMBINED READING OF SECTION 54B ALONG WITH TH E EXPLANATORY NOTES CONTAINED IN CBDT CIRCULAR NO 495 MAKES THE PROVISI ONS CRYSTAL CLEAR. FIRST AND FOREMOST CONDITION FOR ELIGIBILITY FOR DEDUCTIO N AS PROVIDED IN SECTION 54B(1) OF THE ACT IS THAT THE ASSESSEE SHOULD PURCH ASE ANY OTHER LAND FOR BEING USED FOR AGRICULTURAL PURPOSES WITHIN A PERIO D OF TWO YEARS FROM THE DATE OF TRANSFER OF THE ORIGINAL ASSET. THE QUESTIO N THAT ARISES FOR CONSIDERATION IS THAT WHAT SHOULD BE THE POSITION I N THE RETURN OF INCOME 10 RELATING TO THE YEAR IN WHICH TRANSFER TOOK PLACE A ND HOW SHOULD THE AO ADMINISTER AND VERIFY SUCH DEDUCTION CLAIMED BY THE ASSESSEE AS TO FULFILLING THE REQUIRED CONDITIONS. TWO BROAD SCENARIOS EMER GES. FIRSTLY, IT IS POSSIBLE THAT THE ASSESSEE HAS PURCHASED THE NEW AS SET BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME RELATING TO THE YEAR IN WHICH THE ORIGINAL ASSET WAS TRANSFERRED. IN SUCH CASES, THERE IS NO DISPUTE AND THE ASSESSEE SHALL BE ELIGIBLE FOR DEDUCTION SUBJECT TO FULFILLME NT OF OTHER CONDITIONS RELATING TO QUANTUM OF INVESTMENT IN THE NEW ASSET AS WELL AS THE NATURE OF THE NEW ASSET. THE SECOND SCENARIO IS WHERE THE AS SESSEE HAS NOT PURCHASED THE NEW ASSET AND RETURN OF INCOME RELATI NG TO THE YEAR IN WHICH THE ORIGINAL ASSET WAS TRANSFERRED HAS BECOME DUE. IN SUCH SITUATIONS, THE ASSESSEE USED TO CLAIM THE DEDUCTION IN THE YEAR OF TRANSFER AS THE LEGISLATURE HAD PROVIDED A PERIOD OF TWO YEARS FOR PURCHASE OF NEW ASSET WHICH HAVE STILL NOT EXPIRED AT THE TIME OF FILING OF RETURN OF INCOME. APPARENTLY, THE AO USED TO ALLOW SUCH DEDUCTION AND LATER ON, AFTER EXPIRY OF TWO YEARS, WHERE IT WAS FOUND THAT THE ASSESSEE HAS FAILED TO FULFILL THE CONDITION FOR PURCHASE OF THE NEW ASSET WITHIN A PE RIOD OF TWO YEARS, THE ORIGINAL ASSESSMENT WAS RECTIFIED AND DEDUCTION INI TIALLY ALLOWED USED TO BE WITHDRAWN. THIS WAS THE LEGAL POSITION WHICH THE LE GISLATURE INTENDED TO CURE IN RESPECT OF SECOND SCENARIO BY INTRODUCTION OF SUBSECTION 2 TO SECTION 54B OF THE ACT AS IT IS MADE CLEAR BY THE E XPLANATORY NOTES TO FINANCE ACT, 1987. HAVING EXAMINED THE INTENT BEHI ND INTRODUCTION OF SECTION 54(2), LETS EXAMINE ITS PROVISIONS. IF ON E WERE TO DISSECT ITS LANGUAGE, IT READS AS UNDER: THE AMOUNT OF THE CAPITAL GAIN WHICH IS NOT UTILIZE D BY THE ASSESSEE FOR THE PURCHASE OF THE NEW ASSET BEFORE THE DATE O F FURNISHING THE RETURN OF INCOME UNDER SECTION 139, SHALL BE DEPOSITED BY HIM BEFORE FURNISHING SUCH R ETURN SUCH DEPOSIT BEING MADE IN ANY CASE NOT LATER THA N THE DUE DATE APPLICABLE IN THE CASE OF THE ASSESSEE FOR FURNISHI NG 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 11 UTILIZED IN ACCORDANCE WITH, ANY SCHEME WHICH TH E CENTRAL GOVERNMENT MAY, BY NOTIFICATION IN THE OFFICIAL GA ZETTE 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 NEW ASSE T 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 S UB-SECTION IS NOT UTILIZED WHOLLY OR PARTLY FOR THE PURCHASE OF THE NEW ASSET WITHIN THE PERIOD SPECIFIED IN SUB-SECTION (1), THEN THE AMOUNT NOT SO UTILIZED SHALL BE CHARGED UNDER S ECTION 45 AS THE INCOME OF THE PREVIOUS YEAR IN WHICH THE PERIOD OF TWO YEARS FROM THE DATE OF THE TRANSFER OF THE ORIGINAL ASSET EXPIRES; AND THE ASESSEE SHALL BE ENTITLED TO WITHDRAW SUCH A MOUNT IN ACCORDANCE WITH THE SCHEME AFORESAID. 2.9 AS PER LD AR, IT CAN BE NOTED THAT SUB-SECTION (1) OF SECTION 139 IS MENTIONED ONLY WITH REGARD TO THE TIME LIMIT FOR DE POSIT OF THE FUNDS IN CAPITAL SCHEME. THERE IS NO MENTION OF ANY SUB- SE CTION OF SECTION 139 WITH REGARD TO THE TIME LIMIT FOR UTILIZATION OF THE FUN DS FOR THE PURCHASE OF THE NEW ASSET. HENCE, IT CANNOT BE INTERPRETED THAT SE CTION 139 MENTIONED IN THE SECTION IS TO BE READ AS SECTION 139(1). SECTI ON 139 WOULD INCLUDE SECTION 139(4) AND THEREFORE WHERE AGRICULTURAL LAN D IS PURCHASED BEFORE THE TIME LIMIT PRESCRIBED U/S 139(4), ASSESSEE WOUL D BE ENTITLED FOR DEDUCTION AND HE IS NOT REQUIRED TO DEPOSIT THE SAM E IN THE CAPITAL GAIN ACCOUNT SCHEME. 2.10 IN OUR VIEW, THE PROVISIONS OF SECTION 54B(2) CLEARLY PROVIDES THAT WHERE THE AMOUNT OF CAPITAL GAINS ARE NOT UTILIZED BY THE ASSESSEE BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME UNDER SE CTION 139(1) OF THE ACT, IT SHALL BE DEPOSITED WITH A BANK/INSTITUTION IN SUCH SCHEME AS NOTIFIED IN THIS REGARD. IT FURTHER PROVIDES THAT SUCH DEPOSIT SHAL L BE DEEMED TO BE COST OF THE NEW ASSET AND BASED ON SUCH DEPOSIT, THE ASSESS EE SHALL BECOME ELIGIBLE TO CLAIM DEDUCTION TO THE EXTENT OF SUCH D EPOSIT. FURTHER, IT REFERS TO THE INITIAL CONDITION OF TWO YEARS AS SPECIFIED IN SECTION 54B(1) OF THE ACT 12 AND STATES THAT IF THE AMOUNT DEPOSITED UNDER THIS SUB-SECTION IS NOT UTILIZED WHOLLY OR PARTLY FOR THE PURCHASE OF THE NEW ASSET WITHIN THE PERIOD SPECIFIED IN SUB-SECTION (1), THEN THE AMOUN T NOT SO UTILIZED SHALL BE CHARGED UNDER SECTION 45 AS THE INCOME OF THE PREVI OUS YEAR IN WHICH THE PERIOD OF TWO YEARS FROM THE DATE OF THE TRANSFER O F THE ORIGINAL ASSET EXPIRES. IN OUR VIEW, THE PROVISIONS OF SECTION 54 B(2) DOESNT DILUTE THE INITIAL CONDITION AS SPECIFIED IN SECTION 54B(1) AN D CONTINUES TO PROVIDE THAT IN ORDER TO BE ELIGIBLE FOR DEDUCTION, THE UTILISAT ION OF CAPITAL GAINS SHOULD BE WITHIN THE PERIOD OF TWO YEARS FROM THE DATE OF TRANSFER OF THE ORIGINAL ASSET. AT THE SAME TIME, IT SEEKS TO REGULATE AND ADMINISTER THE USAGE OF SUCH FUNDS FOR THE INTERIM PERIOD TILL SUCH TIME TH E FUNDS ARE UTILIZED FOR PURCHASE OF THE NEW ASSET. FOR THE PURPOSES, IT PR OVIDES THAT IF THE ASSESSEE WISHES TO AVAIL THE DEDUCTION UNDER SECTIO N 54B, IT HAS TO DEPOSIT SUCH FUNDS WITH A BANK/INSTITUTION IN SUCH SCHEME A S SPECIFIED AND SUCH DEPOSIT SHALL BE MADE WITHIN DUE DATE OF FILING OF THE RETURN OF INCOME UNDER SECTION 139(1) OF THE ACT AND THE RETURN SHAL L BE ACCOMPANIED BY PROOF OF SUCH DEPOSIT. AS A NECESSARY COROLLARY, IT THUS ENVISAGES A SITUATION THAT A RETURN OF INCOME IS FILED WITHIN THE DUE DAT E UNDER SECTION 139(1) AND BASED ON THE PROOF OF SUCH DEPOSIT WHICH IS SUB MITTED ALONG WITH THE RETURN OF INCOME, THE ASSESSEE SHALL BE ELIGIBLE FO R DEDUCTION. 2.11 THE NEXT ISSUE THAT ARISES FOR CONSIDERATION I S WHERE THE ASSEESSEE UTILISES THE CAPITAL GAINS TOWARDS PURCHASE OF THE NEW ASSET WITHIN A PERIOD OF TWO YEARS FROM THE DATE OF TRANSFER OF THE ORIGI NAL ASSET BUT AT THE SAME TIME, DOESNT FILE THE RETURN OF INCOME UNDER SECTI ON 139(1) BUT FILES THE RETURN BELATEDLY UNDER SECTION 139(4) WITHIN A PERI OD OF TWO YEARS FROM THE CLOSE OF THE FINANCIAL YEAR, WOULD THE PROVISIONS O F SECTION 54B(2) BE APPLICABLE AND THE ASSESSEE REQUIRED TO COMPLY WITH ITS PROVISIONS IN ORDER TO BE ELIGIBLE FOR DEDUCTION UNDER SECTION 54B OF T HE ACT. AS WE HAVE STATED ABOVE, THE PROVISIONS OF SECTION 54B(2) DOESNT DILUTE THIS INITIAL CONDITION AS SPECIFIED IN SECTION 54B( 1) AND CONTINUES TO PROVIDE THAT IN ORDER TO BE ELIGIBLE FOR DEDUCTION, THE UTI LISATION OF CAPITAL GAINS SHOULD BE WITHIN THE PERIOD OF TWO YEARS FROM THE D ATE OF TRANSFER OF THE 13 ORIGINAL ASSET AND WHERE THE SAME IS NOT FULFILLED, THE CAPITAL GAINS WILL BE BROUGHT TO TAX IN THE YEAR IN WHICH THE PERIOD OF T WO YEARS EXPIRES. IN THE INSTANT CASE, IT IS NOT DISPUTED THAT THE CONDITION S OF SECTION 54B(1) ARE FULFILLED I.E, UTILISATION OF CAPITAL GAINS IS WITH IN A PERIOD OF TWO YEARS FROM THE DATE OF TRANSFER OF THE ORIGINAL ASSET. AT THE SAME TIME, THE PROVISIONS OF SECTION 54B(2) SEEKS TO REGULATE AND ADMINISTER THE USAGE OF SUCH FUNDS FOR THE INTERIM PERIOD TILL SUCH TIME THE FUNDS ARE UTILIZED FOR PURCHASE OF THE NEW ASSET AND FOR THE PURPOSES, IT HAS PROVIDED A CUT OFF DATE OF UTILIZATION AND DEPOSIT WHICH IS THE DUE DATE OF FI LING OF RETURN OF INCOME UNDER SECTION 139(1) OF THE ACT. WHERE THE CAPITAL GAINS ARE NOT UTILIZED BEFORE THE DUE DATE UNDER SECTION 139(1), IT REQUIR ES THE ASSESSEE TO DEPOSIT IN THE CAPITAL GAINS SCHEME WHICH CAN SUBSE QUENTLY BE WITHDRAWN AND UTILIZED FOR THE PURCHASE OF THE NEW ASSET. TH E CUT OFF DATE AS PROVIDED UNDER SECTION 139(1) WOULD APPLY EQUALLY TO ASSESSE E WHICH ACTUALLY FILES THE RETURN UNDER SECTION 139(1) OR TO THE ASSESSEE WHO FILES ITS RETURN BELATEDLY UNDER SECTION 139(4) OF THE ACT. IF WE W ERE TO ACCEPT THE ARGUMENTS AS CANVASSED BY THE LD AR, IN THAT SITUAT ION, THE ASSESSEE WHO FILES ITS RETURN OF INCOME UNDER SECTION 139(1) WOU LD BE REQUIRED TO DEPOSIT THE UNUTILISED CAPITAL GAINS IN THE SPECIFIED CAPIT AL GAINS SCHEME AS AGAINST THE ASSESSEE WHO FILES ITS RETURN BELATEDLY UNDER S ECTION 139(4) AND AT THE SAME TIME, DOESNT DEPOSIT THE UNUTILISED CAPITAL G AINS IN THE SPECIFIED CAPITAL GAINS SCHEME AND STILL BE ELIGIBLE FOR DEDU CTION UNDER SECTION 54B OF THE ACT. IN OUR VIEW, THE SAME CANNOT BE READ IN T HE PROVISIONS OF SECTION 54B(2) OF THE ACT. IN OUR VIEW, A COMBINED READING OF SECTION 54B(2) R EAD WITH THE PROVISO CLEARLY PROVIDES THAT THE AMOUNT OF THE CAPITAL GAI N WHICH IS NOT UTILIZED BY THE ASSESSEE FOR THE PURCHASE OF THE NEW ASSET BEFO RE THE DATE OF FURNISHING THE RETURN OF INCOME UNDER SECTION 139(1 ) SHOULD BE DEPOSITED WITH A BANK/INSTITUTION IN A SPECIFIED SCHEME IRRES PECTIVE OF WHETHER THE RETURN HAS ACTUALLY BEEN FILED UNDER SECTION 139(1) OR UNDER SECTION 139(4) OF THE ACT. 14 2.12 NOW THE NEXT QUESTION THAT ARISES IS WHERE AN APPELLANT SATISFIES THE FIRST CONDITION PRESCRIBED UNDER SECTION 54B(1) AND AT THE SAME TIME, DOESNT COMPLY WITH THE SECOND CONDITION AS PRESCRI BED UNDER SECTION 54B(2) OF THE ACT, WOULD THE APPELLANT BE HELD INEL IGIBLE FOR DEDUCTION UNDER SECTION 54B OF THE ACT. HERE, WE HAVE TO LOO K AT THE ISSUE FROM TWO PERSPECTIVES. FIRSTLY, WE DRAW REFERENCE TO THE EX PLANATORY NOTES TO THE FINANCE ACT 2007 WHICH PROVIDES THAT THE ORIGINAL A SSESSMENT NEEDS RECTIFICATION WHENEVER THE TAXPAYER FAILS TO ACQUIR E THE CORRESPONDING NEW ASSET WITHIN THE PRESCRIBED PERIOD OF 2 YEARS AND W ITH A VIEW TO DISPENSE WITH RECTIFICATION OF ASSESSMENTS, THE AMENDMENTS H AS BEEN MADE TO SECTION 54, 54B, 54D AND 54F WHICH PROVIDES FOR A N EW SCHEME FOR DEPOSIT OF AMOUNTS MEANT FOR REINVESTMENT IN THE NEW ASSET. THE LEGISLATIVE INTENTION BEHIND THE INTRODUCTION OF SUBSECTION 2 T O SECTION 54B WAS THEREFORE TO OBVIATE THE NEED FOR RECTIFICATION OF ASSESSMENT ORDERS WHERE THE ASSESSEE FAILS TO PURCHASE THE ASSETS WITHIN PR ESCRIBED TIME LIMIT OF 2 YEARS. IT WAS THEREFORE PROVIDED THAT WHERE THE AS SESSEE DEPOSITS THE FUNDS IN THE SPECIFIED CAPITAL GAINS SCHEME, THE FU NDS SO DEPOSITED IN THE SPECIFIED CAPITAL GAINS SCHEME WERE TAKEN INTO CONS IDERATION FOR ALLOWING THE DEDUCTION AND WERE DEEMED TO BE THE COST OF NEW ASSET. THE SAID DEPOSIT WILL THEREFORE ACT AS A SAFEGUARD TO THE RE VENUE THAT CLAIM OF DEDUCTION HAS BEEN LAWFULLY ALLOWED IN ABSENCE OF A CTUAL PURCHASE OF THE NEW ASSET. IT IS FURTHER PROVIDED THAT SUBSEQUENTL Y WHERE THE ASSESSEE DOESNT UTILIZE THE FUNDS SO DEPOSITED WITH THE PRE SCRIBED TIME LIMIT OF TWO YEARS, THE AMOUNT NOT SO UTILIZED SHALL BE CHARGED UNDER SECTION 45 AS INCOME OF THE PREVIOUS YEAR IN WHICH THE PERIOD OF TWO YEARS FROM THE DATE OF TRANSFER OF THE ORIGINAL ASSET EXPIRES. IN OTHE R WORDS, THE REQUIREMENTS OF SECTION 54B(2) ARE THEREFORE TO SUPPLEMENT, SUPP ORT AND AID IN ADMINISTRATION OF DEDUCTION UNDER SECTION 54B(1) OF THE ACT. SECONDLY, IT IS TO BE FURTHER NOTED THAT SECTION 54 B(2) PROVIDES THAT FOR THE PURPOSES OF SUB-SECTION (1), THE AMOUNT, IF ANY, AL READY UTILISED BY THE ASSESSEE FOR THE PURCHASE OF NEW ASSET TOGETHER WIT H THE AMOUNT SO DEPOSITED SHALL BE DEEMED TO BE THE COST OF THE NEW ASSET. UNDER SECTION 54B(1) OF THE ACT, IT IS FOR THE ASSESSEE TO CLAIM THE DEDUCTION AND IT IS ONLY WHEN THE ASSESSEE MAKES A CLAIM OF SAID DEDUCTION, THE REVENUE IS WELL WITHIN ITS JURISDICTION TO EXAMINE WHETHER THE ASSES SEE HAS SATISFIED THE NECESSARY CONDITIONS FOR CLAIMING SUCH DEDUCTION. UNDER SUBSECTION 1 TO 15 SECTION 54B, IT REQUIRES THE PURCHASE OF THE NEW AS SET AND UNDER SUBSECTION 2 TO SECTION 54B, IT IS PROVIDED THAT EVEN IF THE A SSESSEE HAS NOT PURCHASED THE NEW ASSET BUT HAS DEPOSITED THE FUNDS IN THE CA PITAL GAINS ACCOUNT SCHEME, SUCH DEPOSIT SHALL BE CONSIDERED AS DEEMED COST. IN A SITUATION WHERE ASSESSEE HAS NEITHER CLAIMED NOR DEPOSITED TH E UNUTILISED CAPITAL GAINS CONSIDERATION IN THE CAPITAL GAINS ACCOUNT SC HEME, WHERE IS THE QUESTION OF ALLOWING THE DEDUCTION AT FIRST PLACE. ACCORDINGLY, WHERE AN APPELLANT SATISFIES THE FIRST CONDITION PRESCRIBED UNDER SECTION 54B(1) AND AT THE SAME TIME, NEITHER CLAIM NOR COMPLY WITH THE SE COND CONDITION AS PRESCRIBED UNDER SECTION 54B(2) OF THE ACT, THE APP ELLANT WOULD BE ELIGIBLE FOR DEDUCTION UNDER SECTION 54B OF THE ACT. 2.13 THE PROVISIONS OF SECTION 54F(2) ARE PARI-MATE RIA WITH THE PROVISIONS OF SECTION 54B(2) OF THE ACT. HENCE, THE ABOVE DIS CUSSION WOULD HOLD EQUALLY GOOD FOR THE PURPOSES OF CLAIM OF DEDUCTION UNDER SECTION 54F OF THE ACT. 2.14 THE AO IS ACCORDINGLY DIRECTED TO ALLOW DEDUCT ION TO THE APPELLANT UNDER SECTION 54B AS WELL AS UNDER SECTION 54F OF T HE ACT AFTER VERIFYING THE SATISFACTION OF NECESSARY CONDITION BY THE APPELLAN T AS PRESCRIBED UNDER SECTION 54B(1) AND 54F(1) OF THE ACT RESPECTIVELY. THE GROUND NO. 1 OF THE ASSESSEE IS THUS ALLOWED. 3. REGARDING GROUND NO.2, THE SAME IS NOT PRESSED DURI NG THE COURSE OF HEARING. HENCE THE SAME IS DISMISSED AS NOT PRESSE D. 4. REGARDING GROUND NO.3, THE AO OBSERVED THAT ASSESSE E HAS NOT FILED THE ORIGINAL RETURN WITHIN THE DUE DATE AND THUS TH E REVISED RETURN FILED IS TREATED AS VOID-AB-INITIO AND CANNOT BE ACCEPTED. THEREFORE, HE DISALLOWED THE DEDUCTION OF RS. 37,000/- CLAIMED U/S 48 OF THE IT ACT. 4.1 THE CIT(A) CONFIRMED THE ACTION OF THE AO BY HO LDING THAT THE ORIGINAL RETURN OF INCOME HAS BEEN FILED BY THE APPELLANT ON LY ON 30.03.2012 AS AGAINST THE DUE DATE OF 31.07.2010 FOR FILING RETUR N OF INCOME. NO CLAIM U/S 48 WAS MADE IN THIS RETURN OF INCOME FILED. THEREA FTER, A REVISED RETURN HAS BEEN FILED ON 20.07.2012 BY THE APPELLANT IN WHICH THE INCOME FROM LONG TERM CAPITAL GAIN OF RS. 4,67,235/- HAS BEEN DECLAR ED ALONG WITH INCOME FROM OTHER SOURCES OF RS. 1,67,500/-(THIS AMOUNT WA S DECLARED IN THE 16 ORIGINAL RETURN ALSO) AND AGRICULTURAL INCOME OF RS . 95,000/-(THIS AMOUNT WAS DECLARED IN THE ORIGINAL RETURN ALSO). THE CLA IM OF DEDUCTION OF RS. 37,000/- IS NOT ALLOWABLE AS THE REVISED RETURN OF INCOME IS VOID-AB-INITIO AS HAVING BEEN FILED NOT WITHIN THE TIME PROVIDED UNDE R THE PROVISIONS OF SECTION 139(5) OF THE IT ACT. FURTHER ON MERIT ALS O IT IS SEEN THAT NO EVIDENCE HAS BEEN PLACED ON THE RECORD EITHER AT TH E STAGE OF ASSESSMENT OR IN THE COURSE OF PRESENT PROCEEDINGS TO JUSTIFY T HE CLAIM OF FMV OF THE PROPERTY AS ON 01.04.1981. 4.2 THE LD AR. SUBMITTED THAT IN THE ORIGINAL RETUR N FILED ON 30.03.2002, ASSESSEE HAS CLAIMED DEDUCTION U/S 48 OF RS. 35,500 /- ON ACCOUNT OF COST OF IMPROVEMENT AND RS. 1,500/- ON ACCOUNT OF EXPENDITU RE INCURRED FOR SALE OF LAND TOTALING TO RS. 37,000/-. THUS, THE OBSER VATION OF THE CIT(A) THAT NO CLAIM U/S 48 WAS MADE IN THIS RETURN OF INCOME IS I NCORRECT. FURTHER, THERE IS NO REQUIREMENT U/S 48 THAT IN ORDER TO CLAIM DED UCTION, THE RETURN SHOULD BE FILED IN TIME. THE ASSESSEE DURING THE COURSE O F ASSESSMENT PROCEEDINGS SUPPORTED THE CLAIM THROUGH SALE DEED OF LAND. IT M AY BE NOTED THAT AO HIMSELF HAS ALLOWED THE CLAIM OF DEDUCTION U/S 48 I N CASE OF SHRI SURENDRA SINGH, BROTHER OF THE ASSESSEE WHO HAS ALSO SOLD TH E AGRICULTURAL LAND AND WHOSE CASE IS ALSO FIXED FOR HEARING BEFORE THE HON BLE ITAT. 4.3 WE HAVE HEARD THE RIVAL SUBMISSIONS. IN OUR VI EW, WHERE THE CAPITAL GAINS HAVE BEEN BROUGHT TO TAX, IT WOULD BE JUST AND PROPER THAT THE ASSESSEE IS GRANTED ITS CLAIM OF DEDUCTION UNDER SE CTION 48 OF THE ACT. THE AO IS ACCORDINGLY DIRECTED TO ALLOW THE CLAIM OF DE DUCTION AFTER NECESSARY VERIFICATION. HENCE, GROUND NO. 3 OF THE ASSESSEE IS ALLOWED. ITA NO. 908/JP/14 SHRI SURENDRA SINGH REGARDING GROUND NO.1, SINCE THE FACTS AND CIRCUMST ANCES OF THE CASE ARE SIMILAR AS IN THE CASE OF SHRI VIRENDRA SINGH IN IT A NO. 909/JP/14, OUR DECISION TAKEN THEREIN SHALL APPLY EQUALLY IN RESPE CT OF GROUND NO.1 IN THE INSTANT CASE. HENCE, GROUND NO. 1 IS ALLOWED. REGARDING GROUND NO.2, THE SAME IS NOT PRESSED DURI NG THE COURSE OF HEARING. HENCE, THE SAME IS DISMISSED AS NOT PRESSE D. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 17 ORDER PRONOUNCED IN THE OPEN COURT ON 17/02/2016 SD/- SD/- VKJ-IH-RKSYKUH FOE FLAG ;KNO (R.P.TOLANI) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 17/ 02 /2016 PILLAI VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- SHRI VIREDNRA SINGH & SHRI SUREND RA SINGH, ALWAR 2. THE RESPONDENT- THE ITO, WARD 2(1), ALWAR 3. THE CIT(A), ALWAR 4. THE CIT, ALWAR 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO 909 /JP/13 & 908/JP/13) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 18 SL. NO. DATE INITIAL 1 DATE OF DICTATION 2 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER OTHER MEMBER 3 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P.S./P.S 4 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 5 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P.S./P.S. 6 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 7 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 8 THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER 9 DATE OF DISPATCH OF THE ORDER 19 20 21 22