Case Law Details
Haider Noman Kohrakiwala Vs ACIT (ITAT Bangalore)
The other reasoning of the A.O. not to grant deduction u/s 54F of the Act in respect of a sum of Rs.12,33,200/- was that assessee did not deposit capital gains amount in the capital gains account scheme before the date of furnishing of return of income u/s 139 of the Act. The Hon’ble Jurisdictional High Court in the case of CIT Vs. K. Ramachandra Rao (2015) 277 CTR (Kar) 522 has held that when assessee invest the entire sale consideration in construction of a residential house within the period stipulated u/s 54F(1) of the Act, then section 54(4) of the Act is not attracted and therefore, the exemption u/s 54F of the Act cannot be denied on the ground that he did not deposit the said amount in the capital gains account scheme before the prescribed due date.
A similar view was held in the judgement of the Hon’ble Karnataka High Court in the case of Smt. Fatima Bai in ITA No.435/Bang/2004 (Judgement dated 17.10.2008). In the instant case, assessee had expended Rs.12,33,200/- in July, 2017 i.e. well within period of 3 years from the date of sale of original asset. Therefore, going by the dictum laid down by the Hon’ble jurisdictional High Court in the case of K. Ramachandra Rao (supra) though the assessee has not deposited capital gains amount in the capital gains account scheme within the prescribed time, since the impugned expenditure was incurred within a period of 3 years from the date of sale of original asset, the assessee was entitled to proportionate deduction u/s 54F of the Act.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal at the instance of the assessee is directed against CIT(A)’s order dated 30.08.2019. The relevant Assessment Year is 2015-2016.
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