ITO NON CORPORATE WARD 12(1), CHENNAI vs. SRIMURUGAN PARAMASIVAM, CHENNAI

आदेश /O R D E R

PER VIKRAM SINGH YADAV, ACCOUNTANT MEMBER:

“7. We have heard the rival submissions and carefully perused the materials available on record. From the facts of the case it is apparent that the Ld.AO has denied the benefit of Section 54F to the assessee only for the reason that he has not deposited the sale proceeds in the capital gain scheme account within the due date of filing the return U/s.139(1) of the Act, though the amount was placed with the Nationalized Bank and invested for the purchase of a residential house within the time limit stipulated U/s.54F of the Act. We find this identical issue have been already decided in favour of the assessee by this Bench of the Tribunal in vide order dated 30.01.2018. The gist of the order is reproduced herein below:- 7. We have heard the rival submissions and carefully perused the material on record. At the outset we find this issue squarely covered by the decision of the Chennai Bench of the Tribunal in ITA No.1167/Mds/2016 vide order dated 15.09.2016 wherein on the identical situation it was held that such small technical breach will not disentitle the assessee the benefit of Section 54 of the Act. The gist of the decision is reproduced herein below for reference:-

“8. We have heard the rival submissions and carefully perused the materials available on record. In the decision of Shri Madhuvan Prasad Vs. ITO, supra the Chennai Bench of the Tribunal has allowed the benefit of section 54 of the Act because the assessee had fulfilled all the conditions prescribed under section 54 of the Act barring the deposit of the sale proceeds in the “capital gain scheme account” as prescribed under section 54(2) of the Act. In that decision reliance was also placed in the decision of Hon’ble Apex Court in the case of Motilal Padampat Sugarmill Co.Ltd. Vs. State of Uttar Pradesh & Ors wherein it was held, that ‘thus there is no presumption that every person knows the law. It is often said that everyone is presumed to know the law, but that is not a correct statement there is no such Maxim known to the law. In the given case before us also, it is not disputed that the assessee had not fulfilled the conditions prescribed under section 54 of the Act barring the deposit of the sale proceeds in the “capital gain scheme account”. Moreover, the facts reveal that the assessee had deposited the entire sale proceeds in his savings bank account maintained with nationalized bank out of which he has constructed his house. The only small lacuna assessee had made is that the assessee though had placed the entire sale proceeds in the nationalized bank he has not transferred the same in the “Capital gain scheme account”. Considering these facts of the case and the decisions of the Tribunal and the Hon’ble Apex Court cited above, we are of the considered view that for this small technical lapse of the assessee, the benefit of section 54 should not be denied. Section 54 of the Act is a beneficial provision and a beneficial interpretation has to be made as far as possible for giving benefit to the assessee. The assessee had proceeded to comply with the provisions of section 54 of the Act but has only made a small technical breach which we are of the considered view should not disentitle the assessee for the benefit of section 54 of the Act. Therefore, we hereby direct the learned Assessing Officer to grant the benefit of section 54 of the Act to the assessee and accordingly delete the addition made by him which was further sustained by the learned Commissioner of Income Tax (Appeals).”

7.1 Further the Ld.CIT(A) has also followed the decisions of various higher Judiciary wherein the issued is held in favour of the assessee in similar circumstances. Therefore we do not find it necessary to interfere with the order of the Ld.CIT(A) on this issue.”

7.1 Since the issue has been already decide in favour of the assessee by the Chennai Bench of the Tribunal, Bangalore Bench of the Tribunal mentioned supra and also by the Hon’ble Karnataka High Court mentioned supra, which the Ld.CIT(A) has followed, we do not find it necessary to interfere in his order.”

As per the findings of the ld.Assessing Officer, the assessee has made a total payment of Rs.83,22,500/- and has entered into a sale agreement for a purchase of house property on 06.12.2013 and has also entered into Renovation Contract Agreement for carrying out the necessary renovation within a period of 9 months from the date of commencement of work. However, given that the assessee has not spent any amount towards purchase of the new asset before the due date of filing of the return of income and the amount has not been invested in the specified Scheme of capital gains, the deduction claimed u/s.54F of the Act has been denied by the ld.Assessing Officer.

Ks sundaram