Exemption us 54F available if investment made before time allowed us 139(4) – ITAT

Exemption us 54F-if investment made before time allowed us 139(4) for filing of belated return. ITAT allowed exemption follwoing High Court judgments

ABCAUS Case Law Citation:
ABCAUS 1290 (2017) (07) ITAT

The Issue:
The only issue raised in the instant appeal was against denial of partial exemption u/s 54F due to the fact the part investment was made after the due date prescribed for filing the return of income u/s 139(1) of the Income Tax Act, 1961 (‘the Act’).

Assessment Year : 2012-13

Brief Facts of the Case:
The appellant assessee had sold A plot of land and claimed exemption from capital gain u/s 54F of the Act for purchase of a Floor. From the perusal of bank account, the Assessing Officer (ÁO’) observed that the sale deed of the original asset was dated 03.08.2011 and the return u/s 139(1) was filed on 30.07.2012. Only part of the amount claimed towards exemption u/s 54F was found to have been appropriated before the filing of the return and the remaining amount was appropriated after the filing of the return.

Therefore, the AO proportionately reduced the claim for exemption u/s 54F.

The assessee remained unsuccessful before the ld. CIT(A) who upheld the denial of the exemption.

Observations made by the Tribunal:
The Tribunal noted that the due date for filing of return of income belatedly u/s 139(4) for the assessee was 30.03.2014.

The ITAT opined that  as the remaining amount of Rs.31.40 lac was utilized by the assessee before the due date of return u/s 139(4), there could not be any denial of benefit u/s 54F of the Act.

The ITAT placed reliance on a number of judgments of various High Courts as under:

Hon’ble Guwahati High Court
Punjab & Haryana High Court
Karnataka High Court

The ITAT observed that the reliance placed by the Revenue on the judgment of the Hon’ble Bombay High Court was misconceived inasmuch as the Hon’ble Bombay High Court in the last para of its judgment had also held that the decision in the case of Guwahati High was not applicable to the facts of that case.

The ITAT opined that decision of the Hon’ble Guwahati High Court governs the position as was obtaining in the instant case.

Held:
The appeal of the assessee was allowed. The claim of exemption u/s 54F was restored as claimed by the assessee.