Capital gain exemption u/s 54 not deniable as investment made within time limit specified u/s 139(4)

Munish Babaji Sawant Vs ITO (ITAT Mumbai)

ITAT Mumbai held that capital gain exemption under section 54 of the Income Tax Act cannot be denied as investment was made within the time limit specified under section 139(4) of the Income Tax Act.

Facts- The only issue raised by the Assessee in various grounds of Appeal relates to addition of Rs. 29,40,881/- on account of denial of exemption u/s. 54. The facts and briefs are that as per AIR information, it was noticed that Assessee has sold a residential flat at Rs. 46,00,000/- on 04.06.2010. However, the capital gain arising from the sale of the said flat was not reflected in the ROI, as the assessee believed that the gain was exempt u/s. 54.

However, the revised computation was placed on record during the course of the assessment proceedings, where in the assessee claimed the entire capital gains as exempt u/s. 54.

The capital gains arising from the sale of residential house was invested in purchase of new house vide agreement dated 20.03.12. The entire purchase consideration was paid by 31.03.2012 and possession was obtained on 23.04.2012. However, the assessee did not deposit the amount of capital gains in the capital gains account scheme before the due date of filling return of income u/s 139(1) which was 31.07.2011.

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