Case Law Details
Manilal Dasbhai Makwana Vs ITO (ITAT Ahmedabad)
Section 54B(2) of the Act enjoins that the capital gain is required to be utilized by the assessee towards purchase of new asset before furnishing of return of income under s.139 of the Act. Alternatively, in the event of non-utilization of capital gains towards purchase of new asset, the assessee is required to deposit the capital gain in specified bank account before the due date of filing of return of income under s. 139(1) of the Act. Thus, a distinction has been drawn in the Act in the two situations; (i) where purchase of new asset is involved and (ii) where the assessee opts to deposit the unutilized amount in the specified bank account.
The assessee, in the instant case, does not claim to have deposited the money in the specified bank accounts under capital gain claim at all. Therefore, the claim of the assessee is required to be weighed on the second limb of Section 54(2) of the Act i.e. whether the capital gain has been utilized for the purchase of new asset before the date of furnishing return of income under s.139 of the Act.
As noted, the legislature in its own wisdom has used the expression ‘Section 139’ for purchase etc. of new asset while on the other hand time limit under s.139(1) has been specified for deposit in capital gain account scheme. When viewed equitably and liberally, the distinction between the two different forms of expression to time limit can yield different results. Section 139 encompasses both Section 139(1) and 139(4) of the Act. There is a normal presumption that words are used in Act of Parliament correctly and exactly and not loosely and in-exactly.
In the present case, we are concerned with the utilization of capital gains by purchase of new asset for which the legislature has stopped short by making reference of Section 139 of the Act, in variation to Section 139(1) of the Act referred for deposit in capital gain scheme. This distinction assumes significance for interpretation of a beneficial provision. Thus, a beneficial view may be taken to say that Section 139 being omnibus and colorless would cover extended time limit provided under s. 139(4) of the Act. Thus, when an assessee furnishes return subsequent to due date of filing return under s.139(1) but within the extended time limit under s.139(4), the benefit of investment made up to the date of furnishing of return of income prior to filing return under s.139(4) cannot be denied on such beneficial construction. Thus, on first principles, we hold that the capital gains utilized towards purchase of new asset before furnishing of return of income before either under s.139(1) or under s.139(4) of the Act will be deemed to be sufficient compliance of Section 54(2) of the Act.
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