Padmanabh Pandurang Pawar, Mumbai vs Assessee

सव ी जोगीं संह, या यक सद य एवं नरे कुमार ब लै या, लेखा सद य के सम

BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND

SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER

आयकर अपील सं/ I.T.A. No.7669/Mum/2013 ( नधारण वष / Assessment Year :2009-10 Mr. Padmanabh Pandurang बनाम/ The ITO 20(2)(3), Pawar, 411, Piramal Chambers, Vs. B/31, Parapore Garden, Lal Baug, Parel, Link Road, Andheri (W), Mumbai-400 012 Mumbai-400 053 थायी ले खा सं . /जीआइआर सं . /PAN/GIR No. : AEVPP 6464L (अपीलाथ /Appellant) .. ( यथ / Respondent) अपीलाथ ओर से/ Appellant by: Shri Subhash Shetty यथ क ओर से/Respondent by: Shri Premanand J

सन ु वाई क तार ख / Date of Hearing :03.06.2015 घोषणा क तार ख /Date of Pronouncement :03.06.2015

आदे श / 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-

10.

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 Act.

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 June, 2015

Sd/- Sd/-

(JOGINDER SINGH ) (N.K. BILLAIYA) या यक सद य/JUDICIAL MEMBER लेखा सद य / ACCOUNTANT MEMBER मंब ु ई Mumbai; दनांक Dated : 22 June , 2015 nd

व. न.स./ RJ , Sr. PS आदे श क त ल प अ े षत/Copy of the Order forwarded to :

1. अपीलाथ / The Appellant

2. यथ / The Respondent.

3. आयकर आयु त(अपील) / The CIT(A)-

4. आयकर आयु त / CIT

5. वभागीय त न ध, आयकर अपील य अ धकरण, मंब ु ई / DR, ITAT, Mumbai

6. गाड फाईल / Guard file.

आदे शानस ु ार/ BY ORDER, स या पत त //True Copy// उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील य अ धकरण, मंब ु ई / ITAT, Mumbai