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Income Tax Appellate Tribunal, DELHI BENCH
Before: SHRI BHAVNSH SAINI
ORDER
Per Bhavnesh Saini, Judicial Member :
This appeal by assessee has been directed against the order of Ld. CIT(A) 1, Noida, dated 29th September, 2017 for assessment year 2009-10, challenging the addition of Rs. 10,07,816/-. The AO noted that assessee has sold property at Noida on 30th March, 2009 2. for sale consideration of Rs. 32,00,000/- and capital gain of Rs. 24,36,988/- arisen on the property was not fully utilized by the assessee for purchase or construction of new residential property before the due date of furnishing the return nor it was deposited by the assessee on or before the due date of filing of Income Tax return with the Capital Gains Accounts Scheme as per requirement of provisions contained in Section 54 of IT Act. From the perusal of point no. 2 of reply of the assessee dated 12.09.2016, it was seen that assessee has made payment in investment of new property totaling of Rs. 14,29,172/- before due date of filing of the return. Therefore, assessee was allowed to claim exemption of Rs. 14,29,172/- in investment of new property against long term capital gain of Rs. 24,36,988/-. Accordingly addition of Rs. 10,07,816/- was made to the income of assessee on account of long term capital gain. The assessee challenged the addition before Ld. CIT(A) and it was submitted that filing of the return u/s 139(4) is also permitted as reference in Section 54 is to Section 139 and not 139(1) as claimed by the AO. The Ld. CIT(A) accepted this contention of the assessee. However, the Ld. CIT(A) noted that the same provision prescribes that the unutilized capital gains should be deposited in the designated capital gains account maintained with prescribed bank on or before the due date u/s 139(1) of the Income Tax Act. In the instant case, admittedly, the assessee has not deposited the unutilized long term capital gains in the designated capital gains account with the scheduled bank, therefore, appeal of assessee was dismissed.
After considering rival submission, I am of the view the matter requires re- consideration at the level of the AO. The Ld. Counsel for the assessee submitted that Rs. 59,98,887/- from 01.08.2009 to 31st March, 2011. However, no details are filed at the stage. In this case, the due date of filing of the return was 31st July, 2009 and extended period u/s 139(4) would be expiring on 31st March, 2010. The AO has given benefit of Rs. 14,29,172/- because it was invested in new property before due date of filing of the return. Ld. CIT(A) accepted the contention of the assessee that assessee would be entitled to file return of income u/s 139(4) of the Income Tax Act with reference to Section 54 of the IT Act, Hon’ble Punjab and Haryana High Court case CIT vs. Ms. Jagriti Aggarwal reported in 339 ITR 610 :-
“The assessee sold her house property for Rs. 45 lakhs on January 13, 2006, and having purchased a new residential property on January 2, 2007, claimed deduction under section 54 of the Income-tax Act, 1961. The Assessing Officer declined the claim holding that the assessee failed to deposit the amount in the capital gains account scheme and also failed to purchase house property before the due date of filing the return of income. The Commissioner (Appeals) held that the assessee had purchased a new residential property on January 2, 2007, and the due date according to section 139(4) was March 31, 2007, and, thus, the assessee had complied with the provisions of section 54 of the Act. This order was affirmed by the Tribunal. On appeal : Held, dismissing the appeal, that the sale of the asset had taken place on January 13, 2006, falling in the previous year 2006-07, the return could be filed before the end of the relevant assessment year 2007-08, i.e.,
March 31, 2007. Thus, sub-section (4) of section 139 provides the extended period of limitation as an exception to sub-section (1) of section 139 of the Act. Sub-section (4) was in relation to the time allowed to an assessee under sub-section (1) to file the return. Therefore, such provision was not an independent provision, but relates to the time contemplated under sub-section (1) of section 139 . Therefore, sub-section (4) had to be read along with sub-section (1). Therefore, the due date for furnishing the return of income according to section 139(1) of the Act was subject to the extended period provided under sub-section (4) of section 139 of the Act.
Since no details have been filed by assessee for making further investment in property as per law and Ld. CIT(A) has also not examined this aspect in the light of Judgment in the case of Ms. Jagriti Aggarwal (Supra), therefore, matter requires re- consideration as the level of the AO. I, accordingly set aside the orders of authorities below and restored the matter in issue to the file of the AO with direction to re- decide the issue strictly as per law by giving reasonable sufficient opportunity of being heard to the assessee. The Assessee, at liberty, to produce sufficient evidence before AO in support of the above contention.
In the result appeal of the assessee is allowed for statistical purposes.
(Order Pronounced in the Open Court.)