House property
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
14 December 2013
as per sec 54,if capital gains amt is invested in house within 2 yrs then is the entire capital gain amt fully exempt?
14 December 2013
Investment in the new assets or capital gain, which ever is lower.
14 December 2013
Yes it is so. But there is one condition.
.
The money which can not be invested till the due date of filing of return , should be deposited in bank by opening capital gains account.
.
.
The money which can not be invested till the due date of filing of return , should be deposited in bank by opening capital gains account.
.
14 December 2013
alternatively, you can delay the filing of return if you dont want to deposit the gains in capital gains accounts scheme.
14 December 2013
Delaying the return is not an alternative.
.
Such deposit is to be made on or before the due date of furnishing the return.
.
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Such deposit is to be made on or before the due date of furnishing the return.
.
14 December 2013
sir. you can delay. as long as you file the return within the timelines between 139(4) and invest funds in the new house before filing the return, exemption cannot be disallowed.
14 December 2013
Agree with Paras Ji..Its on or before due date of ROI date....
14 December 2013
Sanjeev Sahab,
please refer to Section 54. It is said that capital gains not applied before filing to return under 139 (it doesnt talk about 139(1)).
please refer to Section 54. It is said that capital gains not applied before filing to return under 139 (it doesnt talk about 139(1)).
14 December 2013
My friend Nikhil, it was intentional, I just wanted to check your reaction, and you did that in few second... LOL.. you are correct dude....
14 December 2013
you may refer to judgments of Hon’ble Gauhati High Court (in CIT v. Rajesh Kumar Jalan (2006)) and ITAT Bangalore (in Shri Nipun Mehrotra v. ACIT (2008) and also
CIT v. Jagtar Singh Chawla (ITA No. 71/2012, AY 2007-08, dated 20 March 2013)
CIT v. Jagtar Singh Chawla (ITA No. 71/2012, AY 2007-08, dated 20 March 2013)
14 December 2013
Sir aap theek ho.. Itna bhawuk mat ho...but in sec 54, the wording is "on or before ROI" so certainly it should be before ROI. Further, the rulling by tribunal in otiose as its not the apex law....
14 December 2013
For your information, I am part of the law framing committee in finance ministry...I know much better law..
14 December 2013
Agree with CA Paras Bafna's sir, if you want to invest with in 2 years from the date of capital gain arise then you should be deposit before to the due date u/s 139(1) or filing of return which is earlier.
And Nikhil Kaushik sir you said exemption available to section 54GB only but the author asking about section 54 exemption. so please refer the sections and clarify me, because of i have to update my self also as well as please provide link for the case laws said by you because of i have to get clarify.
OM SAI SRI SAI JAI JAI SAI
And Nikhil Kaushik sir you said exemption available to section 54GB only but the author asking about section 54 exemption. so please refer the sections and clarify me, because of i have to update my self also as well as please provide link for the case laws said by you because of i have to get clarify.
OM SAI SRI SAI JAI JAI SAI
14 December 2013
Tirumala ji,
all the exemption clauses have same wordings. As long as at the date of filing of return all the funds have been utilized you can claim exemption. It is only where you fail to utilize the funds on date of filing the return, the capital gains accounts scheme gets triggered.
You may refer to Rajesh Kumar Jalan case. it deals with Section 54. Citation 286 ITR 274 (Guahati High Court).
To quote the relevant part:
"From a plain reading of sub-section (2) of section 54 of the Income-tax Act, 1961, it is clear that only section 139 of the Income-tax Act, 1961, is mentioned in section 54(2) in the context that the unutilised portion of the capital gain on the sale of property used for residence should be deposited before the date of furnishing the return of the Income-tax under section 139 of the Income-tax Act. Section 139 of the Income-tax Act, 1961, cannot be meant only section 139(1) but it means all sub-sections of section 139 of the Income-tax Act, 1961. Under sub-section (4) of section 139 of the Income-tax Act any person who has not furnished a return within the time allowed to him under sub-section (1) of section 142 may furnish the return for any previous year at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment year whichever is earlier. Such being the situation, it is the case of the respondent/assessee that the respondent/assessee could fulfil the requirement under section 54 of the Income-tax Act for exemption of the capital gain from being charged to income-tax on the sale of property used for residence up to March 30, 1998, inasmuch as the return of income-tax for the assessment year 1997-98 could be furnished before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment whichever is earlier under sub-section (4) of section 139 of the Income-tax Act, 1961."
all the exemption clauses have same wordings. As long as at the date of filing of return all the funds have been utilized you can claim exemption. It is only where you fail to utilize the funds on date of filing the return, the capital gains accounts scheme gets triggered.
You may refer to Rajesh Kumar Jalan case. it deals with Section 54. Citation 286 ITR 274 (Guahati High Court).
To quote the relevant part:
"From a plain reading of sub-section (2) of section 54 of the Income-tax Act, 1961, it is clear that only section 139 of the Income-tax Act, 1961, is mentioned in section 54(2) in the context that the unutilised portion of the capital gain on the sale of property used for residence should be deposited before the date of furnishing the return of the Income-tax under section 139 of the Income-tax Act. Section 139 of the Income-tax Act, 1961, cannot be meant only section 139(1) but it means all sub-sections of section 139 of the Income-tax Act, 1961. Under sub-section (4) of section 139 of the Income-tax Act any person who has not furnished a return within the time allowed to him under sub-section (1) of section 142 may furnish the return for any previous year at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment year whichever is earlier. Such being the situation, it is the case of the respondent/assessee that the respondent/assessee could fulfil the requirement under section 54 of the Income-tax Act for exemption of the capital gain from being charged to income-tax on the sale of property used for residence up to March 30, 1998, inasmuch as the return of income-tax for the assessment year 1997-98 could be furnished before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment whichever is earlier under sub-section (4) of section 139 of the Income-tax Act, 1961."
14 December 2013
it is a nuance which I also just noticed last year while advising a friend on a similar issue. A similar nuance is that you can invest even outside India to claim exemption.
14 December 2013
Nikhil Saheb, Do not follow the ruling by HC etc, make your own interpretation and trust me that you can do that... it is not necessary that HC is always correct... I challenge HC, SC... you can do that dear...Don't mind.. that's a normal advise dear...
14 December 2013
By the reply of u i once again referred the act and other related explanations and clarifications by different authors with their articles and then i replied however i may not adverse with you but i required supporting evidence to suggest our clients and update my self.
So please provide the link to know the facts of case said by you.
OM SAI SRI SAI JAI JAI SAI
So please provide the link to know the facts of case said by you.
OM SAI SRI SAI JAI JAI SAI
14 December 2013
Friend Tirumala, har cheej ka proof ni hota.. god has given the mind... so apply that and prove in court if you can do that.. I had faced many HC cases.. be practical....
14 December 2013
@ CA.Sanjeev Kumar sir, i agrees with you,
Thank you,
OM SAI SRI SAI JAI JAI SAI
Thank you,
OM SAI SRI SAI JAI JAI SAI
14 December 2013
Sir. Its a normal interpretation of the provisions of the act. I have given u citations. What morw proof you want. Yes you can challenge court rulings. But I see no reason to challenge the correct interpretations. The legislature has specifically referred to 139 instead of 139(1). So I believe that was the deliberate intention of the legislature. Had that been an error, they would have gone for an amendment
14 December 2013
As far as the matter of deposit is concerned
in Section 54(2) it has been already been inserted that
.
[SUCH DEPOSIT BEING MADE IN ANY CASE NOT LATER THAN THE DUE DATE APPLICABLE IN THE CASE OF THE ASSESSEE FOR FURNISHING THE RETURN OF INCOME UNDER SECTION 139(1)]
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Hope you all will find that the opinion given by me is correct as per the law .
.
in Section 54(2) it has been already been inserted that
.
[SUCH DEPOSIT BEING MADE IN ANY CASE NOT LATER THAN THE DUE DATE APPLICABLE IN THE CASE OF THE ASSESSEE FOR FURNISHING THE RETURN OF INCOME UNDER SECTION 139(1)]
.
Hope you all will find that the opinion given by me is correct as per the law .
.
14 December 2013
A similar insertion has also been made in Section 54F(4) also.
.
A remarkable advise by CA Sanjeev Kumar..... to follow ...
"Nikhil Saheb, Do not follow the ruling by HC etc, make your own interpretation and trust me that you can do that... it is not necessary that HC is always correct... I challenge HC, SC... you can do that dear...Don't mind.. that's a normal advise dear..."
.
.
A remarkable advise by CA Sanjeev Kumar..... to follow ...
"Nikhil Saheb, Do not follow the ruling by HC etc, make your own interpretation and trust me that you can do that... it is not necessary that HC is always correct... I challenge HC, SC... you can do that dear...Don't mind.. that's a normal advise dear..."
.
14 December 2013
Bafna Sir,
If you may refer to the cases quoted above, the courts have interpreted the effect of the very amendment you are referring to.
Let me reiterate:
If and only if the amount of capital gain which is not utilised before the date of furnishing (not due date) return under 139, the said capital gains be deposited under capital gains scheme.
So if and only if you file the return without utilizing the capital gains, then you are required to deposit the same before due date under 139(1).
I am sorry I am talking against the collective wisdom here but the section is amply clear with ambiguity.
If you may refer to the cases quoted above, the courts have interpreted the effect of the very amendment you are referring to.
Let me reiterate:
If and only if the amount of capital gain which is not utilised before the date of furnishing (not due date) return under 139, the said capital gains be deposited under capital gains scheme.
So if and only if you file the return without utilizing the capital gains, then you are required to deposit the same before due date under 139(1).
I am sorry I am talking against the collective wisdom here but the section is amply clear with ambiguity.
14 December 2013
a remarkable advise is to read the section as it is drafted. You are trying to insert 139(1) instead of 139. I believe that is the job of either legislature or the judiciary. In case you feel the section is wrongly worded, you all may go ahead and give suggestions to ICAI or finance ministry during the consultation stages of the Finance Act 2014.
And honestly, I do believe that replacing 139 with 139(1) would lead to a harmonious interpretation of the section.
But then we need to fight the case on the basis of the law as it stands today.
And honestly, I do believe that replacing 139 with 139(1) would lead to a harmonious interpretation of the section.
But then we need to fight the case on the basis of the law as it stands today.
14 December 2013
surprising part is that none of you quoted a single circular or judgment or any commentary at all.
So let me help you with it. Delhi bench of ITAT ruled against assessee in the case of Taranbir Singh Sawhney vs Dy Cit, Na Cir. 11(1) 2006 5 SOT 417 Delhi.
However even this judgment was considered as not well laid by Bangalore Bench of ITAT in the case of Sri Nipun Mehrotra vs The ACIT 2008 297 ITR 110 Bang, stating that
"It is true that the ITAT, Delhi in the case of Taran Birsingh Sahni v. DCIT (2006) 5 SOT 417 did not allow the deduction Under Section 54F though the new asset was acquired on 1^st December, 97 but the amount of capital gain was not deposited in the capital gain account by 30^th June, 97 i.e. the due date of filing the return. However, the decision of the learned Gauhati High Court was not available to the learned Delhi Bench. We follow the decision of the Gauhati High Court and hold that the assessee is entitled to exemption of Rs. 2,10,833/- Under Section 54F of the IT Act. In the result, the appeal of the assessee is allowed."
Rest, I leave it to your own application of logic.
Kumar Sahab, I respect your position but not necessarily I have to agree with your views. And since you are part of this committee, I believe you should work towards amending the provisions to make it more logical.
So let me help you with it. Delhi bench of ITAT ruled against assessee in the case of Taranbir Singh Sawhney vs Dy Cit, Na Cir. 11(1) 2006 5 SOT 417 Delhi.
However even this judgment was considered as not well laid by Bangalore Bench of ITAT in the case of Sri Nipun Mehrotra vs The ACIT 2008 297 ITR 110 Bang, stating that
"It is true that the ITAT, Delhi in the case of Taran Birsingh Sahni v. DCIT (2006) 5 SOT 417 did not allow the deduction Under Section 54F though the new asset was acquired on 1^st December, 97 but the amount of capital gain was not deposited in the capital gain account by 30^th June, 97 i.e. the due date of filing the return. However, the decision of the learned Gauhati High Court was not available to the learned Delhi Bench. We follow the decision of the Gauhati High Court and hold that the assessee is entitled to exemption of Rs. 2,10,833/- Under Section 54F of the IT Act. In the result, the appeal of the assessee is allowed."
Rest, I leave it to your own application of logic.
Kumar Sahab, I respect your position but not necessarily I have to agree with your views. And since you are part of this committee, I believe you should work towards amending the provisions to make it more logical.
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