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Tax Publishers Sri Joseph K. Zachariah v. ACIT [IT(IT)A No. 879/Bang/2019, dt. 23-12-2020] : 2021 TaxPub(DT) 2 (Bang-Trib) Reinvestment benefit claim under section 54 on overseas property after due date for filing return under section 139(1) *Facts:* Assessee had a capital gains of Rs. 10.80 crores of which he had invested Rs. 7.59 crores in a new residential property before due date of filing return under section 139(1). The balance of Rs. 2.59 which apparently had to be invested in the capital gains scheme was not do within the due date of filing return. The plea of the assessee was as under -- 1. Section 54 refers to due date of filing return of income this would mean they were eligible for the due date applicable for section 139(4) belated return as well. 2. That due to withholding of taxes on the consideration he could not deposit the balance amount in the capital gains scheme of the balance Rs. 2.59 crores. 3. Further that he be allowed reinvestment benefit of purchase of a residential house outside India in Chicago/USA under section 54 within the time stipulated under section 139(4). 4. The intent of the section is reinvestment in a new house as long as this was done to deny the reinvestment benefit under section 54 citing that the balance consideration was not deposited in the capital gains scheme was incorrect. On higher appeal the Commissioner (Appeals) sustained the additions of the assessing officer who held that since the balance consideration was not invested in the capital gains scheme the capital gains of Rs. 2.59 crores were held to be taxable. On further appeal -- Held in favour of the assessee that they were eligible for the reinvestment benefit under section 54 on the property purchased in USA. It was also confirmed that the due date would be reckoned as per section 139(1) and not as per section 139(4). *Applied:* ITO(IT) v. Arshia Basith IT(IT)A No. 2768/Bang/2017 assessment year 2014-15, Order dt. 14-8-2018 : 2018 TaxPub(DT) 5650 (Bang-Trib) ACIT v. Jai Kumar Gupta (HUF), ITA No. 5303/Mum/2017 assessment year 2013-14, Order, dt. 28-2-2019 Mumbai ITAT : 2019 TaxPub(DT) 1757 (Mum-Trib) Mrs. Suma v. ITO, ITA No. 568/Bang/2018 for assessment year 2006-07, Order, dt. 20-7-2018 Bangalore ITAT : 2018 TaxPub(DT) 4892 (Bang-Trib) Leena J. Shah v. Asstt. CIT (2006) 6 SOT 721 (Ahd.) : 2006 TaxPub(DT) 0917 (Ahd-Trib) *Editorial Note:* The decision pertains to assessment year 2014-15 and it cannot be read to years post 1-4-2015 where in the sections have got amended to read that the reinvestment has to be made in India.

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Sri Joseph K. Zachariah v. ACIT [IT(IT)A No. 879/Bang/2019, dt. 23-12-2020] : 2021 TaxPub(DT) 2 (Bang-Trib)

Reinvestment benefit claim under section 54 on overseas property after due date for filing return under section 139(1)

Facts:

Assessee had a capital gains of Rs. 10.80 crores of which he had invested Rs. 7.59 crores in a new residential property before due date of filing return under section 139(1). The balance of Rs. 2.59 which apparently had to be invested in the capital gains scheme was not do within the due date of filing return. The plea of the assessee was as under --

1. Section 54 refers to due date of filing return of income this would mean they were eligible for the due date applicable for section 139(4) belated return as well.

2. That due to withholding of taxes on the consideration he could not deposit the balance amount in the capital gains scheme of the balance Rs. 2.59 crores.

3. Further that he be allowed reinvestment benefit of purchase of a residential house outside India in Chicago/USA under section 54 within the time stipulated under section 139(4).

4. The intent of the section is reinvestment in a new house as long as this was done to deny the reinvestment benefit under section 54 citing that the balance consideration was not deposited in the capital gains scheme was incorrect.

On higher appeal the Commissioner (Appeals) sustained the additions of the assessing officer who held that since the balance consideration was not invested in the capital gains scheme the capital gains of Rs. 2.59 crores were held to be taxable. On further appeal --

Held in favour of the assessee that they were eligible for the reinvestment benefit under section 54 on the property purchased in USA. It was also confirmed that the due date would be reckoned as per section 139(1) and not as per section 139(4).

Applied: ITO(IT) v. Arshia Basith IT(IT)A No. 2768/Bang/2017 assessment year 2014-15, Order dt. 14-8-2018 : 2018 TaxPub(DT) 5650 (Bang-Trib)

ACIT v. Jai Kumar Gupta (HUF), ITA No. 5303/Mum/2017 assessment year 2013-14, Order, dt. 28-2-2019 Mumbai ITAT : 2019 TaxPub(DT) 1757 (Mum-Trib)

Mrs. Suma v. ITO, ITA No. 568/Bang/2018 for assessment year 2006-07, Order, dt. 20-7-2018 Bangalore ITAT : 2018 TaxPub(DT) 4892 (Bang-Trib)

Leena J. Shah v. Asstt. CIT (2006) 6 SOT 721 (Ahd.) : 2006 TaxPub(DT) 0917 (Ahd-Trib)

Editorial Note: The decision pertains to assessment year 2014-15 and it cannot be read to years post 1-4-2015 where in the sections have got amended to read that the reinvestment has to be made in India.