Mr. Padmanabh Pandurang Pawar, B/31, Parapore Garden, Link Road, Andheri (W), Mumbai-400 053 Vs. The ITO 20(2)(3), 411, Piramal Chambers, Lal Baug, Parel, Mumbai-400 012
June, 24th 2015
IN THE INCOME TAX APPELLATE TRIBUNAL "C" BENCH, MUMBAI
BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND
SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER
/ I.T.A. No.7669/Mum/2013
( / Assessment Year :2009-10
Mr. Padmanabh Pandurang / The ITO 20(2)(3),
Pawar, 411, Piramal Chambers,
B/31, Parapore Garden, Lal Baug, Parel,
Link Road, Andheri (W), Mumbai-400 012
. / . /PAN/GIR No. : AEVPP 6464L
( /Appellant) .. ( / Respondent)
/ Appellant by: Shri Subhash Shetty
/Respondent by: Shri Premanand J
/ Date of Hearing
/Date of Pronouncement :03.06.2015
/ O R D E R
PER N.K. BILLAIYA, AM:
This appeal by the assessee is preferred against the order of the Ld.
CIT(A)-31, Mumbai dt. 29.11.2013 pertaining to assessment year 2009-
2. The sum and substance of the grievance of the assessee is that the
Ld. CIT(A) erred in confirming the order of the AO rejecting the claim of
deduction u/s. 54 of the Act.
2 ITA. No. 7669/M/2013
3. Briefly stated the facts of the case are that while scrutinizing the
return of income for the year under consideration, the AO noticed that the
assessee has sold a plot of land on 18.3.2009 and has claimed exemption
u/s. 54 by making payment on 11.8.2009 and 31.8.2009 of Rs. 3,00,000/-
& 39,00,000/- respectively for purchase of property. To verify the claim
of deduction u/s. 54 of the Act, the AO asked the assessee whether he had
deposited the capital gain in the capital gains scheme account or FDR
account with bank on or before the due date of filing the return i.e.
31.7.2009. The AO further asked the assessee that if the aforestated
conditions are not fulfilled, then why the exemption should not be denied.
The assessee filed a detailed reply. It was explained that the sale
proceeds could not be deposited in the capital gain account but the same
was invested in the deposits with Punjab & Maharashtra Co. Op. Bank
and subsequently the sale proceeds were utilized for the purchase of
house property. After considering the submissions of the assessee, the
AO referred to Sec. 54F(4) of the Act and concluded that the assessee has
not utilized the net consideration received on the sale of plot of land for
the purchase of new house as per provisions of the Act and therefore not
eligible for the claim of deduction u/s. 54F of the Act.
4. Aggrieved, the assessee carried the matter before the Ld. CIT(A)
but without any success.
5. Before us, the Ld. Counsel for the assessee strongly submitted that
there is a debate whether the amount has to be deposited in the capital
gains scheme on or before the due date of filing the return u/s. 139(1) or
Sec. 139(4) of the Act. It is the say of the Ld. Counsel that the assessee
has filed the return u/s. 139(4) of the Act. Before filing the return, the
assessee has utilized the entire sale consideration into the purchase of
3 ITA. No. 7669/M/2013
new house property and therefore entitled for deduction u/s. 54F of the
6. The Ld. Departmental Representative strongly supported the orders
of the lower authorities. It is the say of the Ld. DR that compliance to the
statutory provision is mandatory and the assessee has failed to comply
with the provisions of Sec. 54F of the Act and therefore the Ld. CIT(A)
rightly upheld the denial of Sec. 54F of the Act.
7. Having heard the rival submissions, we have given a thoughtful
consideration to the orders of the authorities below. The undisputed fact
is that the assessee has purchased a new house property before filing the
return u/s. 139(4) of the Act. It is also an undisputed fact that this
transaction has not been disputed by the AO. The only point of dispute is
that the assessee failed to deposit the net consideration in the capital gain
account scheme. The lower authorities are of the strong view that the
investment should have been made before the due date of filing of the
return as per provisions of Sec. 139(1) of the Act. In our understanding
of law, from a reading of Sec. 54F(4), it is clear that only Sec. 139 have
been mentioned therein in the context that the unutilized portion of the
capital gains on the sale of property used for residence should be
deposited before the date of furnishing the return of income u/s. 139 of
the Act. At this point, it can be said that Sec. 139 cannot mean only Sec.
139(1) but it means all sub-sections of Sec. 139. Under Sub-Sec. 4 of
Sec. 139, any person who has not furnished a return within the time
allowed to him, 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 before the completion of the assessment, whichever is earlier. There is
no dispute that the return of the assessee was filed u/s. 139(4) of the Act.
4 ITA. No. 7669/M/2013
There is also no dispute that the assessee has otherwise complied with the
provisions of Sec. 54F of the Act i.e. invested the entire consideration in
the purchase of house property. The Revenue authorities have taken a
hyper technical issue which in our considered opinion cannot be accepted
as it would deny the benefit of a beneficial provision of the assessee. We,
therefore, set aside the order of the Ld. CIT(A) and direct the AO to allow
the deduction u/s. 54F of the Act to the assessee.
8. In the result, the appeal filed by the assessee is allowed.
Order pronounced in the open court at the time of hearing on 3rd
(JOGINDER SINGH ) (N.K. BILLAIYA)
/JUDICIAL MEMBER / ACCOUNTANT MEMBER
Mumbai; Dated : 22 June , 2015
. ../ RJ , Sr. PS
/Copy of the Order forwarded to :
1. / The Appellant
2. / The Respondent.
3. () / The CIT(A)-
4. / CIT
5. , ,
/ DR, ITAT, Mumbai
6. / Guard file.
/ BY ORDER,
, / ITAT, Mumbai