Deduction u/s 54 can not be denied if the amount has been utilized on or before the due date u/s 139(4): ITAT, Cuttack


ITO Puri Vs. Leelavati Paattamahadei

It is held that the deduction u/s.54 of the I.T.Act, 1961 will be available to the appellant if the payments are made on or before the due date as per section 139(4) of the I.T. Act, 1961 and not as per section 139(1) as objected by the AO. In this case, the due date is 31.3.2015. All the payments have been made by the appellant before this date and therefore the appellant is eligible for deduction u/s.54.

Ito, Puri Ward, Puri vs Leelavati Pattamahadei, Puri on 8 May, 2018

                                    1
                                                       ITA No .370/ CTK/ 2017
                                                        C.O. No. 10/ CTK/ 2018
                                                 Asse ssment Year : 20 13- 201 4




             IN THE INCOME TAX APPELLATE TRIBUNAL,
                     CUTTACK BENCH, CUTTACK

         BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER
          AND PAVAN KUMAR GADALE, JUDICIAL MEMBER

                         ITA No.370/CTK/2017
                       Assessment Year : 2013-2014

     ITO, Puri Ward,               Vs.   Leelavati Paattamahadei, Sri
      Puri.                              Nahar Road, Grand Road,
                                         Puri.
     PAN/GIR No.ABHPP 7614 F
           (Appellant)       ..                ( Respondent)

                       C.O. No.10/CTK/2018
                 (arising out of ITA No.370/CTK/2017)
                   Assessment Year : 2013-2014

     Leelavati Paattamahadei, Sri Vs.    ITO, Puri Ward, Puri.
     Nahar Road, Grand Road,
     Puri.
     PAN/GIR No.ABHPP 7614 F
             (Appellant)           ..          ( Respondent)

                   Assessee by      : Shri B.K.Mohapatra, AR
                   Revenue by        : Shri D.K.Pradhan, DR

                   Date of Hearing :     07/05/ 2018
                  Date of Pronouncement : 08 /05/ 2018

                                 ORDER

Per N.S.Saini, AM The appeal filed by the revenue and the cross objection filed by the assessee are directed against the order of the CIT(A)-2, Bhubaneswar dated 22.6.2017 for the assessment year 2013-14.

2. The Revenue has raised the following grounds of appeal:

ITA No .370/ CTK/ 2017 C.O. No. 10/ CTK/ 2018 Asse ssment Year : 20 13- 201 4 “01. On the facts and in the circumstances of the case, the Ld. CIT(A) is not justified in law as well as on facts in deleting the addition of Rs. 53,83,307/- made by the AO disallowing the claim of exemption claimed by the assessee u/s. 54 of the I.T.Act, when the investment made in purchase of new asset by the assessee neither within one year of the transfer of the original asset nor within the due date of filing of return.

02. On the facts and in the circumstances of the case, the Ld. CIT(A) is not justified in law as well as on facts in accepting the contention of the assessee that the exemption can also be allowed if the purchase of new asset has been made within the date of filing of return u/s. 139(4) of the Act.

03. On the facts and in the circumstances of the case, the Ld. CIT(A) is not justified in misconstruing the provisions of Section 54(2) of the Act which speaks that the unutilized portion shall be deposited within the due date under sub-section (1) of 139, at the same time how the utilization in purchase of new asset can be made after the due date and within the date of filing of return u/s. 139(4) of the Act.”

3. The brief facts of the case are that the Assessing Officer observed that the assessee has shown Rs.1,03,83,307/- as long term capital gain arising out of transfer of land & building situated at Dehradun in April, 2012. Out of such long-term capital gain, the assessee has claimed deduction u/s.54EC amounting to Rs.50 lakhs towards subscription of bond of Rural Electrification Corporation and further deduction u/s.54 of Rs.53,83,307/- towards purchase of new flat at Bhubaneswar. The Assessing Officer found that the assessee has paid the booking amount of Rs.12,98,625/- on 6.2.2014, first instalment of Rs.6,49,312/- on 2.4.2014 and the balance amount of Rs.39,02,132/- on 17.3.2015 totalling to Rs.58,50,069/- towards purchase of flat. The Assessing Officer was of the opinion that the assessee will qualify for the deduction ITA No .370/ CTK/ 2017 C.O. No. 10/ CTK/ 2018 Asse ssment Year : 20 13- 201 4 u/s.54 on account of purchase of new flat at Bhubaneswar only if the payments were made on or before the due date as applicable u/s.139(1) i.e. on or before 31.7.2013. The Assessing Officer observed that in this case since the assessee has squarely failed to comply with the terms as laid down u/s.54 of the Act, the claim of deduction of Rs.53,83,307/- was disallowed and same was added to the income of the assessee.

4. Before the CIT(A), the contention of the assessee is that due date is to be taken as applicable u/s.139(4) of the I.T.Act, 1961 which is one year from the end of the assessment year i.e. 31.3.2015. It was submitted that the entire payment of Rs.58,50,069/- was made before 41.4.2015and, therefore, the assessee is eligible to claim deduction u/s.54 of the I.T.Act, 1961. The assessee also relied on following decisions:

C1T v. Rajesh Kumar Jalan(2006)157 Taxman 398(Gauhali) • CITv Jagtar Singh Chawla (2013) 33 taxmann.com 38 (P&H) • C1T v K. RamachandraRao (2015)56 Taxman, com.l 63 (Kar) • C1T v Ms.Jagruti Agarwal (2011)245 CTR (P&H)629 RKP Elayarajan v . DCTT (2012) 23 iaxman.com 206 (Chenai- trib) • Anil Kumar Aurora v ITO (2013) 37 CCH221 (Mum) • NipunMehrotrav Asst. CIT (2008) 110 ITD 520 (Bang) • FathimaBai VIT0(2009) 32 DTR (Kar) 243

5. After considering the submissions of the assessee, the CIT(A) deleted the addition by observing as under:

“Ï have carefully examined the issue. I find that in the judgments quoted by the appellant it is held that the deduction u/s.54 of the I.T.Act, 1961 will be available to the appellant ifITA No .370/ CTK/ 2017 C.O. No. 10/ CTK/ 2018 Asse ssment Year : 20 13- 201 4 the payments are made on or before the due date as per section 139(4) of the I.T.Act, 1961. In this case, the due date is 31.3.2015. All the payments have been made by the appellant before this date and therefore the appellant is eligible for deduction u/s.54. Assessing officer’s argument that reliance cannot be placed upon the judgments of non- jurisdictional courts is not correct. The Income tax authorities need to apply judgments of non-jurisdictional course, if the facts are same and if contrary view has not been taken by other non-jurisdictional courts. Accordingly, the addition made by the AO of Rs.53,83,307/- is order to be deleted and the ground of appeal is allowed.”

6. Ld D.R. relied on the order of the Assessing Officer whereas ld A.R. supported the order of the CIT(A).

7. We have heard the rival submissions, perused the orders of lower authorities and materials available on record. We find that ld D.R. simply relied on the order of the Assessing Officer. He could not point out any specific error in the order of the CIT(A). He also could not bring any material on record to controvert the findings of the CIT(A) that deduction u/s.54 of the Act will be available to the assessee if the payments are made on or before the due date as per section 139(4) of the Act. Therefore, we find no infirmity in the order of the CIT(A), which is hereby confirmed and grounds of appeal of the revenue are dismissed.

8. The cross objection filed by the assessee is in support of the order of the CIT(A). Since we have upheld the findings of the CIT(A) on this issue, the cross objection filed by the assessee has become infructuous and hence, dismissed.

ITA No .370/ CTK/ 2017 C.O. No. 10/ CTK/ 2018 Asse ssment Year : 20 13- 201 4

9. In the result, appeal filed by the revenue and cross objection filed by the assessee are dismissed.

      Order pronounced on        8 /05/2018.

                        Sd/-                          sd/-

          (Pavan Kumar Gadale)                    (N.S Saini)
            JUDICIALMEMBER                     ACCOUNTANT MEMBER

Cuttack; Dated       08 /05/2018
B.K.Parida, SPS
Copy of the Order forwarded to :
1.  The Appellant : ITO, Puri Ward,
     Puri.
2.  The Respondent.    Leelavati Paattamahadei,
    Sri Nahar Road, Grand Road, Puri.
3.   The CIT(A)-2, Bhubaneswar
4.   Pr.CIT-2, Bhubaneswar
5.   DR, ITAT, Cuttack
6.   Guard file.                                             BY ORDER,
     //True Copy//

                                                       SR.PRIVATE SECRETARY
                                                          ITAT, Cuttack

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