Deduction under section 54F- Eligible on payment for residential house up to due date of filing return under section 139(4)
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Case Details: |
Smt. Vatsala Asthana Vs. ITO |
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Appeal Number: |
ITA No. 5635/Del/2016 |
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Order by: |
ITAT Delhi |
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Date of order: |
06/08/2019 |
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Assessment Year: |
2012-13 |
Brief Facts:
- The assessee sold a plot of land situated at Gurgaon (which was held jointly with her husband) and invested a part of sales consideration for purchase of a residential house property.
- The assessee claimed deduction under section 54F of the Income Tax Act amounting to Rs. 90,02,000/- against the capital gain and thus, net capital gain declared as nil.
- In the case of the assessee being individual, the due date of filing return of income u/s 139(1) of the Act was 31-07-2012 and till that date the assessee made payment for purchase of new asset amounting to Rs. 36,87,458/-. The A.O. examined the quantum of deduction allowable under section 54F of the Act and held that the amount of Rs. 36,87,458/- only was eligible for deduction under section 54F of the Act as only Rs. 36,87,458/- was actually invested till the due date of return u/s 139(1).
- However, the assessee claimed that the due date of filing return of income for the purpose of section 54F shall be reckoned as under section 139(4) and therefore, investments made till 31-03-2013 shall be considered as eligible for deduction u/s 54F.
Tribunal Observation:
- Hon’ble High Court of Rajasthan in the case of PCIT Vs. Shankar Lal Saini in ITA No. 153 of 2017 held that where the assessee, an individual deposited unutilised sales consideration in capital gains scheme within the due date of filing belated tax return u/s 139(4), the capital gains relief under section 54F of the Act would be allowable.
- In the case of CIT Vs. K. Ramchandra Rao in ITA No. 494 of 2013, the Hon’ble Karnataka High Court held that the assessee having invested entire sales consideration in construction of residential house within 3 years from the date of the transfer, he could not be denied exemption u/s 54F on the ground that he did not deposit the said amount in capital gains accounts scheme before the due date prescribed u/s 139(1) of the Act.
- Further, the reliance was placed upon the decision of Mumbai Bench of Tribunal in the case of Kishore H Galaiya Vs. ITO in ITA No. 7326/Mum/2010 where it was held that the date of filing return of income under section 139(1) for the purpose of utilisation of the amount for purchase/ construction of residential house has to be construed with respect to the due date prescribed for filing return of income u/s 139(4) of the Act.
Tribunal Verdict:
In view of the above decisions, the payment made by the assessee towards purchase of residential house up to the due date of filing of the return of income prescribed u/s 139(4) would be allowable for considering deduction under section 54F. Accordingly, the A.O. was directed to consider the amount utilised by the assessee for purchase of house till due date of filing return of income prescribed under section 139(4) for deduction under section 54F.
