PR. COMMISSIONER OF INCOME TAX vs. SHRI R SRINIVAS

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ITA/384/2015HC KarnatakaKAHC01038883201502 November 2015Bench: S.SUJATHA,VINEET SARAN4 pages
AI SummaryDismissed

What did the High Court hold?

The Tribunal held that the assessee is entitled to the benefit of Section 54F even if the sale proceeds were not deposited in the Capital Gains Accounts Scheme, provided the entire amount was utilized within the stipulated time. The High Court agreed with this decision.

What were the facts?

The assessee sold a property and claimed exemption under Section 54F of the Income Tax Act. The entire sale amount was utilized for purchasing land and constructing a house within three years. However, the sale proceeds were not deposited in the Capital Gains Accounts Scheme.

What were the issues?

Whether the benefit of Section 54F can be denied solely on the ground of non-deposit of sale proceeds in the Capital Gains Accounts Scheme, when the amount is otherwise utilized within the prescribed period for the intended purpose.

Which sections of the Income-tax Act were involved?

Section 54F

AI-generated summary — verify with the full judgment below

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 2ND DAY OF NOVEMBER, 2015

PRESENT

THE HON'BLE MR. JUSTICE VINEET SARAN

AND

THE HON’BLE MRS. JUSTICE S.SUJATHA

ITA NO.384/2015

BETWEEN:

1.

PR. COMMISSIONER OF INCOME TAX

CENTRAL REVENUE BUILDINGS,

QUEENS ROAD,

BANGALORE-560 001.

2.

THE INCOME-TAX OFFICER, WARD 14(1)

BANGALORE. …APPELLANTS

(BY SRI E.I.SANMATHI, ADV.,)

AND:

SHRI R.SRINIVAS, NO.4/1, RAGHAVENDRA NILAYA, 3RD CROSS, MARUTHI LAYOUT, ADJ. AECS LAYOUT, BANGALORE-560 037. …RESPONDENT

THIS ITA IS FILED U/S.260A OF THE INCOME TAX ACT, 1961, ARISING OUT OF ORDER DATED 4.3.15 PASSED IN ITA NO.79/BANG/2014 FOR THE ASSESSMENT YEAR 2008-09 PRAYING TO DECIDE THE FOREGONG QUESTION OF LAW AND SET ASIDE THE APPELLATE ORDER DATED 4.3.15 PASSED BY THE ITAT, ‘A’ BENCH, BANGALORE, IN APPEAL PROCEEDINGS IN ITA NO.79/BANG/2014 FOR ASSESSMENT YEAR 2008-09.

THIS ITA COMING ON FOR ADMISSION THIS DAY, VINEET SARAN J., DELIVERED THE FOLLOWING:

JUDGMENT

Heard learned counsel for the appellants and perused the record.

2.

The dispute in the present appeal relates to the assessment year 2008-09. The facts of this case are that the respondent-assessee had sold his property and claimed benefit of Section 54F of the Income Tax Act, 1961(for short ‘the Act’). It is not disputed that after selling the property, within three years, the entire sale amount had been utilized for purchase of land and construction of residential house.

3.

The case of the Revenue is that since the sale amount had not been deposited in the Capital Gains Accounts Scheme, the assessee would not be entitled to the benefit of Section 54F of the Act.

4.

The Assessing Officer disallowed the claim of the Revenue and the appeal filed by the assessee was partly allowed. The matter was taken up before the Tribunal, which has allowed the claim of the assessee in toto after recording a categorical finding that it is not disputed that the assessee had utilized the entire sale amount for purchase of land and construction of residential house, within the

stipulated time as provided under Section 54F of the Act. While passing the order, the Tribunal, has relied on the Division Bench decision of this Court in the case of Fathima Bai –vs- Income Tax Officer (2009) 32 DTR 243.

5.

Learned counsel for the Revenue has vehemently submitted that since there was no proper compliance of sub-section 4 of Section 54F of the Act, in as much as no Capital Gains Account was opened by the assessee in which the sale proceeds had been deposited and thereafter utilized for the purchase of land and construction of residential house, the benefit cannot be given to the assessee, even though he may have utilised the entire amount for the purpose as indicated in the aforesaid provision. This Court, in the case of Fathima Bai (supra), has, in similar facts, allowed the benefit to the assessee therein after observing that even though the assessee may have technically defaulted but since the sale amount was duly utilized within the specified period of three years, the assessee would be entitled to the benefit of Section 54F of the Act.

6.

In our view, the facts of this case are similar to the one in the case of Fathima Bai (supra) and we have no reason to disagree with the law laid down by the Division

Bench of this Court in the aforesaid case. As such, in our view, the matter is covered by the aforesaid decision and thus, no substantial question of law arises for determination by this Court. The appeal is accordingly dismissed.

Sd/-

JUDGE

Sd/-

JUDGE TL

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