Mrs. Kamal Murlidhar Mokashi, Pune V. Income-tax Officer,

ITA 939/PUN/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5261 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 21-06-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 06-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Period of limitation; Benefit of exemption
• Section: 143(3); 54B; 54F; 143(1); 148; 54; 6; 12; 139

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.939/PUN/2016 / ASSESSMENT YEAR : 2011-12 MRS. KAMAL MURLIDHAR MOKASHI, AT & POST MOSHI TALUKA, HAVELI DISTRICT, PUNE 412105. PAN : DBYPM5370H. . / APPELLANT V/S THE INCOME TAX OFFICER, WARD-8(3), PUNE. . / RESPONDENT ASSESSEE BY : SHRI SANKET JOSHI. REVENUE BY : SHRI RAJESH GAWALI. PER ANIL CHATURVEDI, AM : THIS APPEAL FILED BY THE ASSESSEE IS EMANATING OUT OF THE ORDER OF COMMISSIONER OF INCOME TAX (A) 9, PUNE, DATE D 29.01.2016 FOR A.Y. 2011-12. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- ASSESSEE IS AN INDIVIDUAL AND STATED TO BE HAVING INCOME FROM AGRICULTURE AND OTHER SOURCES. ASSESSEE FILED HER RETURN OF INCOME FOR A.Y. 2011-12 ON 19.03.2013 DECLARING TOTAL INCOME OF RS.1,27,530/-. THE RETURN OF INCOME WAS INITIALLY PROCESSED U/S / DATE OF HEARING : 21.06.2019 / DATE OF PRONOUNCEMENT: 19.08.2019 2 143(1) OF THE ACT. THEREAFTER, NOTICE WAS ISSUED U/S 148 O F THE ACT ON 24.04.2014 WHICH WAS DULY SERVED ON THE ASSESSEE. T HEREAFTER, THE CASE OF THE ASSESSEE WAS TAKEN UP FOR SCRUTINY AN D ASSESSMENT WAS FRAMED U/S 143(3) R.W.S. 147 OF THE ACT VIDE ORDER DT.13 .02.2015 AND THE TOTAL INCOME WAS DETERMINED AT RS.1,11,19,444/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATT ER BEFORE LD.CIT(A), WHO VIDE ORDER DATED 29.01.2016 (IN APPEAL NO.PN/C IT(A)- 9/ITO WD.8(3)/751/2014-15) DISMISSED THE APPEAL OF ASSESSE E. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN A PPEAL BEFORE US AND HAS R AISED THE FOLLOWING GROUNDS : 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND M LAW, THE LEARNED C.I.T.[A] HAS GROSSLY ERRED IN ASSESSING IN THE HAN DS OF THE APPELLANT THE LONG TERM CAPITAL GAINS OF RS.1,09,91,914.00, O N TRANSFER OF LEASEHOLD RIGHTS IN PLOT OF LAND BEARING NO.97/22 I N SECTOR 6 AT MOSHI PRADHIKARANTALUKA HAVELI DISTRICT PUNE. THE AFORESA ID DECISION BEING PATENTLY ILLEGAL, BAD IN LAW, ARBITRARY, PERVERSE A ND DEVOID OF MERITS THE SAME MAY PLEASE BE VACATED. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED C.I.T. [A] HAS GROSSLY ERRED IN REJECTING THE RELIE F TO THE APPELLANT U/S 54 F OF THE I.T. ACT 1961. THE SAID RELIEF MAY PLEA SE BE GRANTED TO THE APPELLANT. 3. THE VARIOUS REASONS GIVEN BY THE LEARNED ASSESSI NG OFFICER AS WELL AS THE LEARNED C.IT. [A] IN REJECTING THE CLAIM OF THE APPELLANT U/ S 54 F THE I.T. ACT 1961 BEING PATENTLY ILLEGAL, BAD IN LA W, ARBITRARY, PERVERSE AND DEVOID OF MERITS THE SAME MAY PLEASE BE VACATED AND IT MAY PLEASE BE HELD THAT THE LONG TERM CAPITAL GAINS ON TRANSFER 0 LEASEHOLD RIGHTS IN PLOT OF LAND BEARING NO.97/22 I N SECTOR 6 AT MOSHI PRADHIKARAN TALUKA HAVELI DISTRICT PUNE BY THE APPE LLANT WORK OUT TO NIL. 3. BEFORE US, AT THE OUTSET, LD.A.R. SUBMITTED THAT HE DOE S NOT WISH TO PRESS GROUND NO.1. IN VIEW OF THE AFORESAID FACT, GROUND NO.1 OF THE ASSESSEE IS DISMISSED. 4. GROUND NOS.2 AND 3 BEING INTER-CONNECTED ARE CONSIDE RED TOGETHER. 3 4.1. DURING THE COURSE OF RE-ASSESSMENT PROCEEDINGS, AO NOTICED THAT ASSESSEE HAD SOLD A LAND ON 20.04.2010 TO M/S. NAKO DA BUILDCON FOR A CONSIDERATION OF RS.1,10,00,000/- AND THE AMOU NT RECEIVED ON SALE OF LAND WAS INVESTED IN PURCHASE OF FOUR FLATS AND ACCORDINGLY A DEDUCTION OF RS.1,09,91,914/- U/S 54F WAS C LAIMED BY THE ASSESSEE. DURING THE COURSE OF RE-ASSESSMENT PROCEEDINGS THE ASSESSEE WAS ASKED TO JUSTIFY HER CLAIM OF DEDUCTIO N IN VIEW OF THE FACT THAT ASSESSEE HAD NOT FILED THE RETURN OF INCOME WITHIN THE STIPULATED PERIOD U/S 139(1) OF THE ACT, HAD NOT INVESTED THE AMOUNT IN CAPITAL GAIN ACCOUNT SCHEME AS MANDATED U/S 54F(4) OF THE ACT. THE SUBMISSIONS MADE BY THE ASSESSEE WERE NOT FOUND AC CEPTABLE TO THE AO. AO HAS NOTED THAT ASSESSEE WAS ASKED TO PRO DUCE THE DOCUMENTS TO JUSTIFY THE FOUR FLATS PURCHASED BY THE AS SESSEE WERE USED AS ONE SINGLE RESIDENTIAL HOUSE BUT ASSESSEE COULD NOT PRODUCE ANY EVIDENCE. AO WAS THEREFORE OF THE VIEW THAT ASSESS EE HAD PURCHASED THE FLATS FOR COMMERCIAL PURPOSE I.E., GIVING THEM ON RENT. AO ALSO NOTED THAT THE FOUR FLATS THAT WERE PURCHASED B Y THE ASSESSEE WERE FROM M/S. SAIRAJ BUILDERS & DEVELOPERS, WHICH WAS A PARTNERSHIP FIRM IN WHICH THE SONS OF THE ASSESSEE WERE T HE PARTNERS AND THE FLATS WERE PURCHASED IN THE JOINT NAMES I.E., IN THE NAME OF ASSESSEE AND HER SON. AO THEREFORE CONCLUDED THAT THE PURCHASE OF FOUR FLATS WAS A DECORATIVE TRANSACTION TO AVOID THE INCOM E-TAX. CONSIDERING THE AFORESAID FACTS, AO DENIED THE CLAIM OF DEDUC TION U/S 54F OF THE ACT TO THE ASSESSEE. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO UPHELD T HE ORDER OF AO. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW BEFORE US. 4 5. BEFORE US, LD.A.R. REITERATED THE SUBMISSIONS MADE BEFORE AO AND LD.CIT(A) AND FURTHER SUBMITTED THAT ASSESSEE HAD SO LD RIGHTS IN LAND VIDE REGISTERED SALE DEED DATED 20.04.2010 TO M/S. NAKODA BUILDCON FOR A TOTAL CONSIDERATION OF RS.1,10,00,000/-. ON 12.07.2011 ASSESSEE HAD BOOKED FOUR FLATS FOR RS.1,03,60,000/- ON THE FIRST FLOOR OF THE PROJECT OF M/S. SAIRAJ BUILDERS AND D EVELOPERS AND THE ALLOTMENT LETTER TO THIS EFFECT WAS ISSUED BY THE BUILDER. HE SUBMITTED THAT THE TOTAL COST OF FOUR FLATS WERE FIXED AT RS.1,03,60,000/- AND OUT OF WHICH RS.69,14,588/- WAS PAID TO THE BUILDER UPTO THE DATE OF RECEIPT OF ALLOTMENT LETTER. BY 31. 07.2011 WHICH IS THE DUE DATE FOR FILING OF RETURN U/S 139(1) OF THE A CT, ASSESSEE HAD PAID TOTAL CONSIDERATION OF RS.69,14,588/-. T HE BALANCE CONSIDERATION OF RS.40,93,000/- TOWARDS ACQUISITION O F FOUR FLATS WAS PAID BETWEEN 01.08.2011 AND 12.09.2012 AND BY 12.09.2012 THE ENTIRE CONSIDERATION OF RS.1,10,07,588/- WAS PAID FOR THE ACQUISITION OF THE FLATS. HE SUBMITTED THAT THE CO NSTRUCTION OF RESIDENTIAL PROJECT WAS COMPLETED BY THE BUILDER AND CO PY OF THE COMPLETION CERTIFICATE DATED 15.03.2013 IS PLACED AT PAGE 21 OF THE PAPER BOOK. HE SUBMITTED THAT ON 19.03.2013 ASSESSEE H AD ENTERED INTO REGISTERED AGREEMENT TOWARDS THE PURCHASE OF FOUR FLATS. ASSESSEE HAD FILED RETURN OF INCOME U/S 139(4) OF THE ACT ON 19.03.2013 AND TILL THAT DATE, SINCE THE PAYMENT FOR PURCHA SE OF FLATS WAS MADE, ASSESSEE HAD CLAIMED DEDUCTION U/S 54F OF THE ACT. 6. WITH RESPECT TO THE CONTENTION OF THE REVENUE THAT ASSESSEE HAD NOT FURNISHED ANY EVIDENCE ABOUT THE FOUR FLATS BEING USED AS A SINGLE RESIDENTIAL HOUSE, HE SUBMITTED THAT ALL THE RESIDEN TIAL FLATS 5 WERE ADJACENT FLATS WHICH WERE LOCATED AT THE SAME FLOOR. HE SUBMITTED THAT THE ENTIRE FIRST FLOOR OF THE PROJECT WAS A CQUIRED BY THE ASSESSEE. HE FURTHER SUBMITTED THAT THE CONTENTION OF THE REVENUE THAT DEDUCTION U/S 54F OF THE ACT CAN BE ALLOWE D ONLY IN RESPECT OF ONE FLAT IN VIEW OF THE AMENDMENT TO SEC.54F(1) O F THE ACT IS NOT TENABLE AS THE AMENDMENT TO SEC.54F(1) OF THE ACT WHEREBY THE WORD A RESIDENTIAL HOUSE HAS BEEN REPLACED WITH ONE RESIDENTIAL HOUSE IS PROSPECTIVE AND IS ONLY APPLICABLE FROM A.Y. 201 5-16 AND PRIOR TO A.Y. 2015-16, THE ASSESSEE WAS ELIGIBLE TO CLAIM DED UCTION U/S 54F OF THE ACT IN RESPECT OF THE ADJACENT UNITS LOCA TED ON THE SAME FLOOR OF THE BUILDING. 7. WITH RESPECT TO THE REVENUES CONTENTION THAT THE PURCHASE OF FLATS BY THE ASSESSEE FROM M/S. SAIRAJ BUILDERS & DEVELOPER S IS A DECORATIVE TRANSACTION ENTERED INTO ONLY TO AVOID THE TAX, LD.A.R. SUBMITTED THAT M/S. SAIRAJ BUILDERS AND DEVELOPERS IS A SE PARATE LEGAL ENTITY DISTINGUISHABLE FROM THE ASSESSEE AND ITS PART NERS. HE SUBMITTED THAT ASSESSEE HAD ENTERED INTO AGREEMENT WI TH M/S. SAIRAJ BUILDERS AND DEVELOPERS, THE AGREEMENTS WERE REGIS TERED AND ASSESSEE HAD PAID SUBSTANTIAL AMOUNT OF STAMP DUTY AND REGISTRATION CHARGES OF MORE THAN RS.6 LAKHS FOR GETTING T HE TITLE OF THE PROPERTY IN HER NAME. HE FURTHER SUBMITTED THAT S ECTION DOES NOT PUT ANY EMBARGO TO THE EFFECT THAT THE NEW HOUSE CANNOT BE ACQUIRED FROM A RELATED PARTY. HE SUBMITTED THAT NO EV IDENCE HAS BROUGHT ON RECORD BY THE REVENUE TO DEMONSTRATE THA T THE TRANSACTIONS ARE SHAM AND WAS ENTERED INTO WITH AN INTE NTION TO AVOID TAX. 6 8. WITH RESPECT TO THE REVENUES CONTENTION THAT ASS ESSEE HAD PURCHASED FLATS IN JOINT NAME ALONG WITH HER SON, LD.A.R. SUBMITTED THAT THE ENTIRE FUNDS FOR PURCHASE OF FLATS HAS BEEN MADE FROM THE ACCOUNT OF ASSESSEE AND NO AMOUNT HAS BEEN P AID BY HER SON AND THAT ASSESSEE BEING A SENIOR CITIZEN, HER SONS NAME WAS INCLUDED IN THE PURCHASE DEED SO AS TO AVOID LEGAL COMPLIC ATIONS AFTER THE DEMISE OF ASSESSEE. HE FURTHER SUBMITTED THAT SECTION DOES NOT MANDATE THAT THE NEW HOUSE SHOULD BE ACQUIRED SO LELY AND EXCLUSIVELY IN THE NAME OF ASSESSEE. HE ALSO PLACED RELIANC E ON THE FOLLOWING DECISIONS WHEREIN IT HAS BEEN HELD THAT WHEN THE E NTIRE AMOUNT HAS BEEN INVESTED BY THE ASSESSEE, THEN DEDUC TION CANNOT BE DENIED SOLELY ON THE GROUND THAT THE NAME OF THE SO N OF THE ASSESSEE WAS ALSO ADDED IN THE PURCHASE DEED AS JOINT OWNER . I) DIRECTOR OF INCOME TAX (IT) VS. JENNIFER BHIDE [349 ITR 80 (KAR)] II) VISHWASRAO M. PATIL VS. ITO [ITA NO.1563/PUN/2012] DATED 22.01.2016. 9. WITH RESPECT TO THE REVENUES CONTENTION THAT SINCE THE ASSESSEE HAD SOLD THE ORIGINAL ASSET ON 20.04.2010, THE T IME LIMIT OF TWO YEARS TO PURCHASE NEW HOUSE WAS 20.04.2012 AND SINCE THE ASSESSEE HAD ACQUIRED THE NEW HOUSE VIDE AGREEMENT DA TED 19.03.2013 I.E., AFTER THE STIPULATED TIME, THE ASSESSEE IS NO T ELIGIBLE TO CLAIM DEDUCTION U/S 54F OF THE ACT, HE SUBMITTED THAT THE NEW FLATS WERE BOOKED BY THE ASSESSEE VIDE ALLOTMENT LETTER DATED 12.07.201 WITH THE BUILDER WHEN THE BUILDING WAS UNDER CONSTRUCTION AND THE ENTIRE PAYMENT WAS MADE BY SEPTE MBER, 2012. HE SUBMITTED THAT THE COMMENCEMENT CERTIFICATE FOR THE IM PUGNED 7 PROJECT WAS 06.01.2011 WHEREAS THE COMPLETION CERTIFICATE WAS ISSUED ON 15.03.2013. HE SUBMITTED THAT SINCE THE NEW FLA TS WERE BOOKED BY THE ASSESSEE VIDE ALLOTMENT LETTER DT.12.07.2011 WHEN THE BUILDING WAS UNDER CONSTRUCTION, THEN IN VIEW OF THE CBDT CIRCULAR NO.471 DATED 15.10.1986, THE TRANSACTION OF BOOKING FLAT VID E ALLOTMENT LETTER IS TO BE CONSIDERED IN THE NATURE OF CON STRUCTION OF HOUSE FOR THE PURPOSE OF SEC.54F OF THE ACT AND NOT PUR CHASE. IN SUPPORT OF HIS CONTENTION THAT WHEN ASSESSEE HAD BOOK ED NEW FLAT, BUILDING WAS UNDER CONSTRUCTION AND WHEN THE SUBSTANTIAL CONSIDERATION WAS PAID WITHIN TWO YEARS, THE DEDUCTION U/S 54F OF THE ACT IS TO BE ALLOWED IN RESPECT OF THE ENTIRE COST OF THE NEW FLAT, HE RELIED ON THE FOLLOWING DECISIONS : I) CIT VS. BHARATI C. KOTHARI [244 ITR 352 (CAL)] II) CIT VS. J.B. HILLA WADIA [216 ITR 376 (BOM)]. III) SHASHI VERMA VS. CIT [224 ITR 106 (MP)]. LD.A.R. FURTHER SUBMITTED THAT THE HONBLE BOMBAY HIGH COU RT IN A RECENT DECISION IN THE CASE OF PCIT VS. VEMBU VAIDYANATH IN ITA NO.1459/2016 DATED 22.01.2019 HAS HELD THAT THE DATE OF ALLOTMENT BE CONSIDERED TO BE THE DATE ON WHICH THE PURCHASER OF PROPERTY CAN BE SAID TO HAVE BEEN ACQUIRED THE PROPERTY EVEN THOUG H THE AGREEMENT WITH THE BUILDER WAS EXECUTED ON LATER DATE. 10. WITH RESPECT TO LD.CIT(A)S REASON FOR REJECTION OF C LAIM THAT ASSESSEE HAD ONLY PAID RS.69,14,588/- TO THE BUILDER UPTO 31.07.2011 BEING THE DUE DATE OF FILING OF RETURN U/S 139(1) O F THE ACT, HE SUBMITTED THAT ASSESSEE HAD FILED THE RETURN U/ S 139(4) OF 8 THE ACT ON 19.03.2013 THOUGH THE TIME LIMIT PRESCRIBED U/ S 139(4) OF THE ACT WAS 31.03.2013. HE SUBMITTED THAT SINCE PRIOR TO THE FILING OF RETURN OF INCOME, ASSESSEE HAD UTILIZED THE ENTIRE SALE PROCEEDINGS FOR INVESTMENT FOR ACQUISITION OF NEW RESIDENTIAL HOUSE, ASSE SSEE WAS NOT REQUIRED TO DEPOSIT THE AMOUNT IN CAPITAL GAIN AC COUNT SCHEME. IN SUPPORT OF THE CONTENTION THAT TIME LIM IT FOR MAKING INVESTMENT IN CAPITAL GAIN ACCOUNT SCHEME IS THE DUE DATE OF FILING RETURN U/S 139(4) OF THE ACT AND NOT THE DUE DATE OF FILING RETURN U/S 139(1) OF THE ACT, HE PLACED RELIANCE ON THE FOLLOWING DECISIONS : I) CIT VS. RAJESH KUMAR JALAN [286 ITR 274 (GAU)]. II) CIT VS. JAGRITI AGGARWAL [339 ITR 610 (P&H). III) FATHIMA BAI VS. ITO [32 DTR 243 (KAR)]. HE FURTHER SUBMITTED THAT THE DECISION IN THE CASE OF HU MAYUN SULEMAN MERCHANT VS. CCIT REPORTED IN 387 ITR 421 RE LIED UPON BY THE LD. D.R. CANNOT COME TO THE RESCUE OF THE DEP ARTMENT AND ON THE CONTRARY, IT FAVOURS THE ASSESSEE AS THE FACTS A RE DISTINGUISHABLE BECAUSE IN THAT CASE ASSESSEE HAD FILED RET URN U/S 139(1) OF THE ACT AND THE UN-UTILIZED AMOUNT OF CAPITAL GAIN S WAS NOT INVESTED BY THE ASSESSEE IN THE CAPITAL GAIN ACCO UNT SCHEME BEFORE FILING OF SUCH RETURN. IN THE PRESENT CASE, HE SU BMITTED THAT ASSESSEE HAD FILED THE RETURN OF INCOME U/S 139(4) OF THE ACT AND THE ENTIRE AMOUNT OF SALE CONSIDERATION WAS UTILIZED FOR INVESTME NT IN CONSTRUCTION OF NEW HOUSE BEFORE THE FILING OF RETURN U/S 139(4) OF THE ACT. HE FURTHER SUBMITTED THAT IN THE AFORESAID DECIS ION IN PARA 6 SUB-PARA (V) AND (W), THE HON'BLE HIGH COURT HAD EXPR ESSED ITS AGREEMENT WITH THE VIEW TAKEN BY THE HONBLE GAUHATI HIGH COURT 9 IN THE CASE OF RAJESH KUMAR JALAN (SUPRA). HE FURTHER S UBMITTED THAT THE DISTINGUISHING FACTOR IN THE CASE OF HUMAYUN SULEM AN MERCHANT (SUPRA) VIS--VIS AND RAJESH KUMAR JALAN (SUPR A) HAS ALSO BEEN NOTED BY THE HONBLE ITAT PUNE IN THE CASE O F RAMRAO D. PIMPLE VS. ITO IN ITA NO.473/PN/2015 DATED 30.10.2017. HE ALSO PLACED ON RECORD THE COPY OF THE AFORESAID DECISION. HE THEREFORE, CONSIDERING THE AFORESAID SUBMISSIONS, SUBMITTED THAT AO B E DIRECTED TO GRANT DEDUCTION U/S 54F OF THE ACT. LD. D.R. ON THE OTHER HAND, SUPPORTED THE ORDER OF LOWER AUTHORITIES. 11. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT GROUND IS WITH RES PECT TO DENIAL OF THE CLAIM OF DEDUCTION U/S 54F OF THE ACT. THE CLAIM O F DEDUCTION HAS BEEN DENIED TO THE ASSESSEE INTER-ALIA FOR THE FOLLOWING REASONS : (A) ASSESSEE HAS CLAIMED DEDUCTION FOR 4 FLATS PURCHASED BY HER AND NOT A SINGLE FLAT. (B) THE FLATS WERE PURCHASED IN JOINT NAME I.E., OF THE ASSESSE E ALONG WITH HER SON. (C) ASSESSEE HAD PURCHASED THE FLAT BEYOND THE PERIOD OF TW O YEARS PRESCRIBED UNDER THE PROVISIONS. (D) UNUTILIZED PORTION OF THE AMOUNTS SUBJECT TO CAPITAL GAINS TAX WAS NOT DEPOSITED IN CAPITAL GAIN ACCOUNT SCHEME AS MANDATED U/S 54F(4) OF THE ACT. (E) THE PURCHASE OF FLATS BY THE ASSESSEE WAS FROM A FAMILY FIRM. 10 THE ACTION OF AO OF DENYING THE CLAIM OF DEDUCTION WAS UPH ELD BY LD.CIT(A). WITH RESPECT TO PURCHASE OF FOUR FLATS, IT IS AN U NDISPUTED FACT THAT THE FLATS WERE BOOKED BY THE ASSESSEE VIDE ALLO TMENT LETTER DATED 12.07.2011 WHEN THE BUILDING WAS UNDER CONSTRUCTION . THE ENTIRE PAYMENT FOR THE PURCHASE OF FLATS HAS BEEN MADE U PTO SEPTEMBER 2012 I.E., UPTO THE DATE OF FILING OF RETURN OF INCO ME. IT IS REVENUES CONTENTION THAT THE ASSESSEE HAD ACQUIRED T HE NEW ASSET ONLY WHEN THE AGREEMENT WAS ENTERED INTO ON 19.03.2013 I.E., AFTER THE STIPULATED PERIOD. WE FIND THAT RECENTLY HONBLE BOMB AY HIGH COURT IN THE CASE OF VEMBU VAIDYANATH (2019) 413 ITR 24 8 (BOM) AFTER CONSIDERING THE CBDT CIRCULAR NO.471 DATED 15.10.1986 AND CIRCULE NO.672 DATED 16.12.1993 HAS HELD THAT THE DATE OF ISSUANCE OF ALLOTMENT LETTER BY THE BUILDER IS THE DATE OF ACQUISITION OF PROPERTY. 12. AS FAR AS THE ISSUE OF DEDUCTION ON FOUR FLATS PURCHA SED BY THE ASSESSEE IS CONCERNED, THE SUBMISSION OF THE ASSESSEE TH AT ALL THE FOUR RESIDENTIAL FLATS ARE ADJACENT FLATS LOCATED ON THE SA ME FLOOR OF THE BUILDING HAS NOT BEEN CONTROVERTED BY THE REVENUE. WE FURTHER FIND THAT THE HONBLE MADRAS HIGH COURT IN THE CASE OF TR ILOKCHAND AND SONS VS. ITO REPORTED IN (2019) 413 ITR 189 HAS HEL D THAT SO LONG AS THE ASSESSEE HAS PURCHASED ONE MORE RESIDENTIA L HOUSE OUT OF THE SALE CONSIDERATION FOR WHICH THE LIABILITY TO THE CAPITA L GAIN TAX U/S 45 ARISES, ASSESSEE WAS ENTITLED TO DEDUCTION THEREU NDER ON THE ENTIRE INVESTMENT. WE FURTHER FIND THAT HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. GITA DUGGAL REPORTED IN (2013) 357 ITR 153 HAS HELD THAT THE FACT THAT RESIDENTIAL HOUSE CONSISTS OF S EVERAL 11 INDEPENDENT UNITS CANNOT BE THE REASON FOR DENYING THE CLAIM OF DEDUCTION U/S 54/54F OF THE ACT. 13. AS FAR AS THE ISSUE OF PURCHASING FLATS IN JOINT NAME IS CONCERNED, IT IS THE ASSESSEES CONTENTION THAT THE ENT IRE CONSIDERATION TOWARDS THE PURCHASE OF FLATS WAS INVESTED BY THE ASSESSEE AND NO AMOUNT WAS CONTRIBUTED BY HER SON AN D FURTHER THE NAME OF THE SON WAS INCLUDED AS JOINT OWNER TO AVOID LEG AL COMPLICATION AS THE ASSESSEE IS AN OLD LADY. THE AFORESAID SUBMISSIONS HAVE NOT BEEN CONTROVERTED BY THE REVENUE . WE FIND THAT HONBLE KARNATAKA HIGH COURT IN THE CASE OF DIT VS . MRS. JENNIFER BHINDE REPORTED IN (2012) 349 ITR 80 HAS OBSERVE D THAT TO ATTRACT SEC.54 AND SEC.54EC OF THE ACT, WHAT IS THE MAT ERIAL IS INVESTMENT OF SALE CONSIDERATION IN ACQUIRING THE RESIDENTIA L PREMISES OR CONSTRUCTING A RESIDENTIAL PREMISES OR INVEST ING THE AMOUNTS IN THE BONDS. IT FURTHER OBSERVED IN THE ENTIRE SECTION OF 54, THE REQUIREMENT THAT PURCHASE TO BE MADE OR THE CONSTRUCTION TO BE PUT UP BY THE ASSESSEE IS IN THE NAME OF THE ASS ESSEE IS NOT EXPRESSLY STATED. WE FURTHER FIND THAT THE HONBLE DELH I HIGH COURT IN THE CASE OF CIT VS. KAMAL WAHAL REPORTED IN 351 ITR 4 HAS ALSO HELD THAT THE NEW RESIDENTIAL HOUSE NEED NOT BE PURCHA SED BY THE ASSESSEE IN HIS OWN NAME OR EXCLUSIVELY IN HIS NAME. 14. AS FAR AS THE ISSUE OF NOT DEPOSITING THE UNUTILIZED PO RTION OF AMOUNT SUBJECT TO CAPITAL GAINS IN CAPITAL GAIN ACCOUNT SC HEME IS CONCERNED, IT IS FACT THAT ASSESSEE HAD NOT FILED THE RETURN U/S 139(1 ) OF THE ACT BUT HAD FILED THE RETURN OF INCOME WITHIN THE T IME LIMIT 12 PRESCRIBED U/S 139(4) OF THE ACT WHICH WAS UPTO 31.03.201 3. IT IS ASSESSEES CASE THAT PRIOR TO FILING OF INCOME TAX RETUR N, ASSESSEE HAD UTILIZED THE ENTIRE SALE PROCEEDS IN ACQUISITION OF THE N EW RESIDENTIAL HOUSE. THE AFORESAID CONTENTION OF THE ASSESSE E HAS NOT BEEN CONTROVERTED BY REVENUE. WE FIND THAT HONBLE PUN JAB AND HARYANA HIGH COURT IN THE CASE OF CIT VS. MS. JAGRITI AG GARWAL (SUPRA) HAS HELD THAT BENEFIT OF SEC.54 OF THE ACT IS ALLOWAB LE WHEN THE ASSESSEE HAS ACQUIRED THE NEW ASSET BEFORE FILING OF R ETURN OF INCOME. WE FURTHER FIND THAT THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF RAMARAO DHONDIBA PIMPLE VS. ITO (SUPRA) AFTE R CONSIDERING THE DECISIONS OF HONBLE GAUHATI HIGH COURT IN C ASE OF CIT VS. RAJESH KUMAR JALAN REPORTED IN 286 ITR 274 AN D CIT VS. MS. JAGRITI AGGARWAL (SUPRA) AND THE DECISION OF HONBLE BOM BAY HIGH COURT IN THE CASE OF HUMAYUN SULEMAN MERCHANT VS. C CIT (SUPRA) HAS HELD THAT ASSESSEE IS ELIGIBLE TO CLAIM EXEMPTION IN RESPECT OF INVESTMENTS MADE BEFORE FILING OF RETURN OF INCOM E. WE FURTHER FIND THAT THE TRIBUNAL HAS NOTED THAT IN THE CASE OF HUMAYUN SULEMN MERCHANT (SUPRA), THE HONBLE BOMBAY HIGH COURT HAS NOT DISAPPROVED THE RATIO LAID DOWN IN THE CAS E OF RAJESH KUMAR JALAN (SUPRA) BUT THE CLAIM WAS REJECTED ON THE P ECULIAR FACTS OF THE CASE AND THE RELEVANT FINDINGS OF THE CO-ORDINATE B ENCH OF THE TRIBUNAL ARE AS UNDER : 8. WE HAVE HEARD THE SUBMISSION MADE BY REPRESENTA TIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF AUTHORITIES BE LOW. THE GROUND NO. 1 RAISED IN THE APPEAL BY ASSESSEE IS AGAINST R EJECTING ASSESSEES CLAIM OF EXEMPTION RS.71,56,000/- U/S. 54B OF THE A CT ON THE GROUND THAT INVESTMENT HAS BEEN MADE AFTER DUE DATE FOR FI LING RETURN OF INCOME U/S. 139(1) OF THE ACT. IT IS AN UNDISPUTED FACT THAT ASSESSEE HAS INVESTED RS.71,56,000/- IN THREE PROPERTIES IN AUGUST, 2012 I.E. AFTER DUE DATE FOR FURNISHING RETURN OF INCOME U/S. 139 (1) OF THE ACT HAD ELAPSED. THE ASSESSING OFFICER REJECTED ASSESSE ES CLAIM OF 13 EXEMPTION IN RESPECT OF AFORESAID INVESTMENT FOR TH E REASON THAT AS PER THE PROVISION OF SECTION 54B(2), THE ASSESSEE S HOULD HAVE INVESTED/DEPOSITED THE AMOUNT BEFORE THE DUE DATE F OR FUR THE DUE DATE FOR FURNISHING RETURN OF IN NISHING RETURN OF INCOME UNDER S COME UNDER SUB-SECTION SECTION (1) OF SECTION 139 OF THE ACT. 9. THE HON'BLE GAUHATI HIGH COURT IN THE CASE OF CI T VS. RAJESH KUMAR JALAN (SUPRA.) WHILE CONSIDERING ASSESSEES C LAIM OF EXEMPTION U/S. 54 WHERE THE ASSESSEE HAD DEPOSITED UNUTILIZED PORTION OF CAPITAL GAIN IN THE SPECIFIED SCHEME AFTER THE STIP ULATED TIME FOR FURNISHING RETURN OF INCOME U/S. 139(1) OF THE ACT HAS EXPIRED HELD: 6. FROM A PLAIN READING OF SUB-S (2) OF S. 54 OF T HE IT ACT, 1961, IT IS CLEAR THAT ONLY S. 139 OF THE IT ACT, 1 961, IS MENTIONED IN S. 54(2) IN THE CONTEXT THAT THE UNUTI LIZED PORTION OF THE CAPITAL GAIN ON THE SALE OF PROPERTY USED FO R RESIDENCE SHOULD BE DEPOSITED BEFORE THE DATE OF FURNISHING T HE RETURN OF THE INCOME-TAX UNDER S. 139 OF THE IT ACT. SEC. 139 OF THE IT ACT, 1961, CANNOT BE MEANT ONLY AS S. 139(1) BUT IT MEANS ALL SUB-SECTIONS OF S. 139 OF THE IT ACT, 1961. UNDER S UB-S.(4) OF S. 139 OF THE IT ACT ANY PERSON WHO HAS NOT FURNISHED A RETURN WITHIN THE TIME ALLOWED TO HIM UNDER SUB-S. (1) OF S. 142 MAY FURNISH THE RETURN FOR ANY PREVIOUS YEAR AT ANY TIM E BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASS ESSMENT YEAR OR BEFORE THE COMPLETION OF THE ASSESSMENT WHI CHEVER IS EARLIER. SUCH BEING THE SITUATION, IT IS THE CASE O F THE RESPONDENT/ASSESSEE THAT THE RESPONDENT/ASSESSEE CO ULD FULFIL THE REQUIREMENT UNDER S. 54 OF THE IT ACT FO R EXEMPTION OF THE CAPITAL GAIN FROM BEING CHARGED TO INCOME-TAX O N THE SALE OF PROPERTY USED FOR RESIDENCE UPTO 30TH MARCH, 1998, INASMUCH AS THE RETURN OF INCOME-TAX FOR THE ASST. YR. 1997- 98 COULD BE FURNISHED BEFORE THE EXPIRY OF ONE YEAR FROM THE EN D OF THE RELEVANT ASSESSMENT YEAR OR BEFORE THE COMPLETION O F THE ASSESSMENT WHICHEVER IS EARLIER UNDER SUB-S. (4) OF S. 139 OF THE IT ACT, 1961. 10. THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. MS. JAGRITI AGGARWAL (SUPRA.) WHILE CONSIDERING THE ISSUE, WHETHER THE ASSESSEE IS ELIGIBLE FOR CLAIMING BENEFIT OF EXEMPT ION U/S. 54, IF CAPITAL GAIN AMOUNT IS DEPOSITED/INVESTED AFTER DUE DATE OF FURNISHING RETURN OF INCOME U/S. 139(1) BUT BEFORE THE DUE DATE OF FU RNISHING RETURN OF INCOME U/S. 139(4) HELD : 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 DIFF ERENT ASSESSEES. IN THE CASE OF ASSESSEE AS THE RESPONDENT, IT IS 31 ST DAY OF JULY OF THE ASSESSMENT YEAR IN TERMS OF CL. (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 CER TAIN CIRCUMSTANCES. IT READS AS UNDER : (4) ANY PERSON WHO HAS NOT FURNISHED A RETURN WIT H THE TIME ALLOWED TO HIM UNDER SUB-S (1), OR WITHIN THE TIME ALLOWED UNDER A NOTICE ISSUED UNDER SUB S.(1) OF S. 142, MA Y 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 BEFORE THE COMPLETION OF THE ASSESSMENT WHICHEVER I S EARLIER: 14 PROVIDED THAT WHERE THE RETURN RELATES TO A PREVIOU S YEAR RELEVANT TO THE ASSESSMENT YEAR COMMENCING ON THE 1 ST DAY OF APRIL, 1988 OR ANY EARLIER ASSESSMENT YEAR, THE REF ERENCE TO ONE YEAR AFORESAID SHALL BE CONSTRUED AS A REFERENC E TO TWO YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. ' 11. A READING OF THE AFORESAID SUB-SECTION WOULD SH OW THAT IF A PERSON HAS NOT FURNISHED THE RETURN OF THE PREVIOUS YEAR WITHIN THE TIME ALLOWED UNDER SUB-SO (1) I.E., BEFORE 31ST DAY OF JULY OF THE ASSESSMENT YEAR, THE ASSESSEE CAN FILE RETUR N BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASS ESSMENT YEAR. 12. THE SALE OF THE ASSET HAVING TAKEN PLACE ON 13T H JAN., 2006, FALLING IN THE PREVIOUS (SIC-ASSESSMENT) YEAR 2006-07, THE RETURN COULD BE FILED BEFORE THE END OF RELEVAN T ASST. YR. 2007-08 (SIC-2006-07) I.E. 31ST MARCH, 2007. THUS, SUB-SO (4) OF S. 139 PROVIDES EXTENDED PERIOD OF LIMITATION AS AN EXCEPTION TO SUB-SO (1) OF S. 139 OF THE ACT. SUB-SO (4) IS I N RELATION TO THE TIME ALLOWED TO AN ASSESSEE UNDER SUB-SO (1) TO FIL E RETURN. THEREFORE, SUCH PROVISION IS NOT AN INDEPENDENT PRO VISION, BUT RELATES TO TIME CONTEMPLATED UNDER SUB-SO (1) OF S. 139. THEREFORE, SUCH SUB-SO (4) HAS TO BE READ ALONG WIT H SUB-SO (1). SIMILAR IS THE VIEW TAKEN BY THE DIVISION BENCH OF K ARNATAKA AND GAUHATI HIGH COURTS IN FATIMA BAI AND RAJESH KU MAR JALAN CASES (SUPRA) RESPECTIVELY. 11. THE HON'BLE PUNJAB & HARYANA HIGH COURT IN ANOT HER CASE CIT VS. JAGTAR SINGH CHAWLA REPORTED AS 33 TAXMANN.COM 38 FOLLOWING THE RATIO LAID DOWN IN THE CASE OF RAJESH KUMAR JAL AN (SUPRA.) ALLOWED ASSESSEES CLAIM OF EXEMPTION U/S. 54F WHER E THE ASSESSEE PAID SUBSTANTIAL AMOUNT OF SALE CONSIDERATION FOR R ESIDENTIAL HOUSE WITHIN EXTENDED PERIOD OF FILING RETURN OF INCOME U /S. 139(4) OF THE ACT. 12. IN THE CASE OF HUMAYUN SULEMAN MERCHANT VS. CCI T (SUPRA.), WE FIND THAT THE HON'BLE BOMBAY HIGH COURT HAS NOT DIS APPROVED THE RATIO LAID DOWN IN RAJESH KUMAR JALAN CASE. HOWEVER , THE ASSESSEES CLAIM OF EXEMPTION U/S. 54F WAS REJECTED THEREIN AS THE RATIO LAID DOWN IN RAJESH KUMAR JALANS CASE WAS NOT APPLICABL E ON THE FACTS AND CIRCUMSTANCES OF THAT PARTICULAR CASE. RELEVANT EXTRACT OF THE FINDINGS AND OBSERVATION OF HON'BLE JURISDICTIONAL HIGH COURT READS AS UNDER: (V) LASTLY AND IN THE ALTERNATIVE, IT IS SUBMITTED BY MR. CHATTERJI, THAT AS THE ENTIRE AMOUNT HAS BEEN PAID TO THE DEVELOPER/BUILDER BEFORE THE LAST DATE TO FILE THE RETURN OF INCOME UNDER SECTION 139 OF THE ACT, THE EXEMPTION IS AVAILABLE TO THE APPELLANT UNDER SECTION 54F(4) OF THE ACT. I N SUPPORT, THE DECISION OF GAUHATI HIGH COURT IN RAJESH KUMAR JALA N'S CASE (SUPRA.) IS RELIED UPON. THE GAUHATI HIGH COURT IN THE ABOVE CASE WAS CONCERNED WITH THE INTERPRETATION OF SECTI ON 54 OF THE ACT. IT CONSTRUED THE PROVISION OF SUB-SECTION (2) OF SECTION 54 OF THE ACT WHICH IS IDENTICALLY WORDED TO SUB-SECTION (4) OF SECTION 54F OF THE ACT THE COURT IN THE AFORESAID DECISION HELD THAT THE REQUIREMENT OF DEPOSITING BEFORE THE DATE OF FURNIS HING OF RETURN OF INCOME UNDER SECTION 139 OF THE ACT HAS N OT TO BE 15 RESTRICTED ONLY TO THE DATE SPECIFIED IN SECTION 13 9(1) OF THE ACT BUT WOULD INCLUDE ALL SUB-SECTION OF 139 INCLUDING SUB-SECTION (4) OF THE ACT. ON THE ABOVE BASIS IT CONCLUDED THA T IF THE AMOUNT IS UTILIZED BEFORE THE LAST DATE OF FILING O F THE RETURN UNDER SECTION 139 OF THE ACT THEN THE PROVISION OF SECTION 54(2) OF THE ACT WOULD NOT HIT THE ASSESSEE BEFORE IT. IT IS NOT VERY CLEAR IN THE ABOVE CASE WHETHER THE AMOUNTS WERE U TILIZED BEFORE THE ASSESSEE FILED ITS RETURN OR NOT. (W) HOWEVER, THE FACTUAL SITUATION ARISING IN THE P RESENT CASE IS DIFFERENT. THE RETURN OF INCOME IS ADMITTEDLY FILED ON 4TH NOVEMBER, 1996. IN TERMS OF SECTION 54F(4) OF THE A CT AS INTERPRETED BY THE GAUHATI HIGH COURT IN RAJESH KUM AR JALAN'S CASE (SUPRA.) THE AMOUNTS SUBJECT TO CAPITAL GAIN O N SALE OF THE CAPITAL ASSET FOR PURPOSE OF EXEMPTION, HAS TO BE U TILIZED BEFORE THE DATE OF FILING OF RETURN OF INCOME. IN THIS CAS E 4TH NOVEMBER, 1996 IS THE DATE OF FILING THE RETURN OF INCOME. IT IS NOT DISPUTED THAT ON 4TH NOVEMBER, 1996 WHEN THE RETURN OF INCOM E WAS FILED, THE ENTIRE AMOUNT WHICH WAS SUBJECT TO CAPIT AL GAIN TAX HAD NOT BEEN UTILIZED FOR THE PURPOSE OF CONSTRUCTI ON OF NEW HOUSE NOR WERE THE UNUTILIZED AMOUNTS DEPOSITED IN THE NOTIFIED BANK ACCOUNTS IN TERMS OF SECTION 54F (4) OF THE ACT BEFORE FILING THE RETURN OF INCOME. IT IS ALSO TO B E NOTED THAT IN LINE WITH THE INTERPRETATION OF GAUHATI HIGH COURT ON SECTION 54F(4) OF THE ACT, THE ASSESSING OFFICER HAD TAKEN INTO ACCOUNT ALL AMOUNTS UTILIZED FOR CONSTRUCTION OF A HOUSE BE FORE FILING THE RETURN OF INCOME ON 4TH NOVEMBER, 1996 FOR EXTENDIN G THE BENEFIT OF EXEMPTION UNDER SECTION 54F OF THE ACT. THEREFORE, IN THE PRESENT FACTS, THE DECISION OF THE GAUHATI HIGH COURT IN RAJESH KUMAR JALAN'S CASE (SUPRA) WOULD NOT APPLY S O AS TO HOLD THAT THE APPELLANT HAD COMPLIED WITH THE SECTI ON 54F(4) OF THE ACT. 13. IN THE PRESENT CASE, THE ASSESSEE HAS CLAIMED E XEMPTION U/S. 54B OF THE ACT. WE OBSERVE THAT THE PROVISION OF SU B SECTION (2) OF SECTION 54, PROVISION OF SUB SECTION (2) OF SECTION 54B AND PROVISIONS OF SUB SECTION (4) OF SECTION 54F ARE PERIMETERIA. THE JUDGMENTS ON WHICH THE LD. AR HAS PLACED RELIANCE ARE RENDERED W ITH REFERENCE TO CLAIM OF EXEMPTION U/S. 54/54F. SINCE PROVISIONS OF SUB SECTION (2) OF SECTION 54 AND 54B AND (4) OF SECTION 54F ARE IDENT ICAL, THEREFORE, RATIO LAID DOWN BY THE VARIOUS HON'BLE HIGH COURTS WOULD APPLY TO PROVISIONS OF SECTION 54B (2) AS WELL. THUS, IN THE LIGHT OF FACTS OF THE CASE AND VARIOUS DECISIONS AS DISCUSSED ABOVE, WE F IND MERIT IN GROUND NO. 1 RAISED BY THE ASSESSEE IN APPEAL AND T HE SAME IS ACCEPTED. THE ASSESSEE IS ELIGIBLE TO CLAIM EXEMPTIO N U/S. 54B IN RESPECT OF INVESTMENT MADE TOWARDS PURCHASE OF AGRI CULTURE LAND WITHIN THE TIME LIMIT FOR FILING RETURN OF INCOME SP ECIFIED UNDER SECTION 139(4). BEFORE US, REVENUE HAS NOT POINTED TO ANY CONTRARY BIND ING DECISION IN ITS SUPPORT. IN VIEW OF THE AFORESAID FACTS AND RELYING ON THE AFORESAID DECISIONS, WE ARE OF THE VIEW THAT ASSESSEE IS ELIG IBLE FOR 16 DEDUCTION U/S 54F OF THE ACT. WE THEREFORE DIRECT THE A O TO GRANT DEDUCTION. THUS, THE GROUNDS OF THE ASSESSEE ARE ALLOWED. 15. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED ON 19 TH DAY OF AUGUST, 2019. SD/- SD/- ( VIKAS AWASTHY ) ( ANIL CHATURVEDI ) / JUDICIAL MEMBER ! / ACCOUNTANT MEMBER PUNE; DATED : 19 TH AUGUST, 2019. YAMINI '#$%&'('% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4 5. 6. THE CIT(A)-9, PUNE. THE PR. CIT-5, PUNE. !,# ! , / DR, ITAT, A PUNE; &'(/ GUARD FILE. / BY ORDER // TRUE COPY // ) *+, - / SR. PRIVATE SECRETARY # ! , / ITAT, PUNE.