Dharmista Mehta Vs ITO (ITAT Mumbai)
ITAT Mumbai held that exemption under section 54 for the amount invested towards the purchase of new residential property under consideration up to the date of filing of belated return under section 139(4) of the Income Tax Act.
Facts-
The case of the assessee was selected for scrutiny under CASS to examine large deduction claimed u/s. 54 of the Act. During the course of proceeding, it was observed by Assessing Officer (AO) that assessee has sold immovable property on 26.05.2011 for Rs. 1.7 Cr. and purchased a new property on 30.04.2013 for Rs. 1.66 Cr.
It is also observed that assessee has failed to deposit the amount in Capital Gains Accounts Scheme (CGAS) and also failed to purchase House Property before the due date of filing of return as per section 139(1) of the Act i.e. 31.07.2012. Based on these observations, AO issued a show-cause that why Rs. 1,19,45,236/- should not be taxed under the head “Long Term Capital Gain (LTCG)”.
AO disallowed the claim of the assessee. Being aggrieved, assessee preferred an appeal before CIT(A) which was dismissed. Being aggrieved, the present appeal is preferred.
Conclusion-
Held that It can be safely be concluded that the assessee in the case before us is entitled to claim exemption under section 54 to the extent she had invested towards the purchase of new residential property under consideration upto the date of filing of belated return under section 139(4) i.e. 31.03.2014. In the case before us assessee purchased new property well before the deadline given in section 139(4) i.e. 30.04.2013 for Rs. 1,66,74,200/-. Which we find is much in excess of LTCG of Rs. 1,19,45,236/-. We therefore, in terms of our aforesaid observations set-aside the order of the CIT(A) and vacate the disallowance of the assessee’s claim of exemption under section 54 of Rs. 1,19,45,236/- as was sustained by him.
