Case Law Details
Shri Arun Kumar Jain Vs. ITO (ITAT Delhi)
The A.O. noted that as per Section 54(2) of the I.T. Act, the amount of capital gain, which is not utilized by him for the purchase of new asset before the date of furnishing the ITR under section 139, shall be deposited by him, before furnishing such return in an account in any such bank or institution as may be specified in the Official Gazette, shall be accompanied by proof of such deposit. In this case, assessee has not deposited the unutilized amount in capital gain account before filing of ITR of 2014-2015 i.e., 26th July, 2015, so benefit of capital gain to the tune of unutilized amount and not deposited in capital gain account will not be given to the assessee and it will be charged to tax under section 45 of the I.T. Act. The A.O. accordingly, made addition of Rs. 12,93,349/- under the head “Long Term Capital Gains”.
The assessee challenged the addition before the Ld. CIT(A), in which, the assessee briefly highlighted that due date of filing of the return for assessment year under appeal under section 139(1) was 31st July, 2014. The assessee however, filed the return of income on 26th July, 2015. It was submitted that assessee has paid Rs. 75 lakhs to the vendor instead of Rs. 50 lakhs mentioned by the A.O. in the assessment order. The additional amount of Rs. 25 lakhs was paid vide cheque No. 000002 dated 30th July, 2014 drawn on HDFC Bank, East of Kailash, New Delhi. Photo copy of the cheque was also filed. It was, therefore, submitted that assessee duly utilized the capital gain for purchase of new asset before the due date of furnishing of the ITR under section 139 as per the conditions provided under section 54(2) of the I.T. Act. It was, therefore, submitted that since assessee utilized Rs. 75 lakhs for the purpose of purchase of new residential property, therefore, addition should be deleted.
The only dispute left for consideration is, whether assessee appropriated/ utilized Rs. 25 lakhs for purchase of property in question before due date of filing of the return of income. Ld. D.R. pointed-out from the bank statement that date of cheque is 1st August, 2014. However, in the bank statement such date is mentioned as “value date”. It did not say that it is the date of the cheque. The assessee filed copy of the cheque before Ld. CIT(A) to show that date of the cheque No. 000002 was dated 30th July, 2014, on which, no adverse comments have been made by the Ld. CIT(A). The assessee filed bank certificate in which it is clarified that cheque in question was dated 30th July, 2014 which was subsequently cleared on 1st August, 2014. The assessee also filed receipt of the vendor to the same effect also. It may also be noted here that the copy of the sale deed duly registered on 3rd September, 2014 for purchase of property have been filed on record, in which the total consideration of the property of Rs.80 lakhs have been mentioned which is also mentioned by the A.O. in the assessment order in which the assessee paid Rs. 25 lakhs each on two occasions vide cheque dated 2nd April, 2014 and 15th April, 2014. It is further mentioned in the sale deed that assessee paid further Rs. 25 lakhs vide cheque No. 000002 dated 30th July, 2014. Further payments have been made vide different cheques and TDS deducted is also mentioned. The assessee filed return of income on 26th July, 2015. Therefore, there is no question of assessee making a theory of afterthought. The registered documents support the explanation of the assessee that date of cheque was 30th July, 2014. Even if there was any doubt, this fact could have been verified from the vendor. The Ld. CIT(A) rejected the explanation of assessee that when assessee can make payment of Rs. 50 lakhs in April, why assessee waited till the end of July, 2015. There may be some terms of payment of consideration to the vendor and the availability of the funds with the assessee. Even the payment of Rs. 50 lakhs was made in two installments. Therefore, it may not be a good reason to reject the explanation of assessee because assessee made further payment even after July, 2014 as per the sale deed. Considering the totality of the facts and circumstances, it is clear that assessee had made payment of Rs. 25 lakhs to the vendor on 30th July, 2014 and if the cheque is en cashed immediately thereafter on 1stAugust, 2014, there is nothing wrong in the explanation of assessee. I am, therefore, satisfied that assessee appropriated and utilized the amount of capital gain before the due date of filing of the return of income. The addition is, therefore, totally uncalled-for.
FULL TEXT OF THE ITAT ORDER IS AS FOLLOWS:-
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Dear Sir,
There are number of assessees wanted to file IT Returns for the Financial years 2015-16 and 2016-17
If CBDT permits the assessee to file the IT Returns for the above financial years it will help number of assessees