In a recent Judgement pronounced by Jaipur Tribunal in case of SMT. RENU JAIN NEW DELHI vs. ITO, WARD 5(2) JAIPUR on 06.03.2020, wherein Hon’ble ITAT was of the opinion that where the amount was deposited in capital gain accounts scheme before filing of return U/s 139(4) of the Act, the same be eligible for deduction U/s 54F of the Act.
The facts of the case are as under:
Assessment in this case was completed U/s 143(3) r.w.s. 147 of the Act dated 08.10.2016. On the basis of information received during the course of assessment proceedings for the assessment year 2013-14, the notice u/s 148 of the Act was issued on 27.01.2016 stating that the assessee has wrongly claimed deduction U/s 54F of the Act as the assessee has deposited a sum of Rs. 22,50,000/- under capital gain account scheme on 03.12.2011 after due date of filing of return of income i.e, 31.07.2011, therefore, the income of the assessee has escaped assessment within the meaning of section 147 of the Act.
During the course of hearing, the ld. AR submitted that the assessee has earned Long Term capital gain of Rs. 17,09,798 from sale of plots at a consideration of INR 22,50,000/- on 10 February 2011. In order to avail benefit of deduction u/s 54F of the Act, the assessee has set aside the entire funds for purchase of residential property by opening an FDR with Bank of Rajasthan (Now ICICI Bank) on 20 January 2011 i.e. well before the due date of filing the return under section 139 of the Act for AY 2011-12. Later on, the Appellant came to know that as per the provisions of section 54F, the FDR is required to be made under Capital Gain Account Scheme (‘CGAS’). Therefore, in order to rectify the procedural mistake, the Appellant on 03 December 2011 en-cashed the FDR with ICICI bank and deposited such amount on very same day into Capital Gains Scheme FDR with Canara Bank without utilizing the same for any other purpose.
Assessee relied on the judgement of jurisdictional High Court i.e. judgement of Hon’ble Rajasthan High court in case of Shankar Lal Saini [2018] 89 taxmann.com 235 (Raj) wherein it was held that even amount deposited in CGAS before filing of return u/s 139(4) shall also be allowed for deduction as per provisions of subsection 4 of section 54F of the Act. The similar judgment was pronounced by Punjab & Haryana High Court in the case of Ms. Jagriti Aggarwal [2011] 15 taxmann.com 146.
Hon’ble Tribunal considered various judgement’s referred by assessee and came to a conclusion that In the instant case, where the amount was deposited in capital gain accounts scheme before filing of return U/s 139(4) of the Act, respectfully following the decision of Hon’ble Rajasthan High (supra), the same be eligible for deduction U/s 54F of the Act. In the result, the matter is decided in favour of the assessee and against the Revenue and the sole ground of appeal is allowed.
Our Opinion:
It is worth mentioning that even though judgement has allowed depositing amount in CGAS till due date of return filing u/s 139(4). However the due date mentioned u/s 54F says that one needs to deposit the amount in CGAS till due date of 139(1) and therefore if that AO won’t rely on the judgement and will make addition to the income and hence you must be read to present your case before CIT(A) because AO generally don’t rely on judgement’s they mainly rely on facts and literal interpretation of law.
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