ITAT Allows Capital Gain Exemption u/s 54 Despite Belated ITR

ITAT Allows Capital Gain Exemption u/s 54 Despite Belated ITR

The brief facts of the case are that the assessee is an individual and deriving income from Salary, House Property, Capital Gain and Other sources. For the Asst. Year 2013-14, assessee filed its belated Return of Income u/s. 139(1) on 26.03.2014 declaring total income of Rs.31,71,420/-. The return was taken up for scrutiny assessment and determining the total income as Rs. 54,88,603/-.

The Assessing Officer has made the addition of Rs. 23,17,183/- as Long Term Capital Gain. The assessee sold a residential house on 09.01.2013 for Rs. 45,00,000/- and then purchased an unfinished flat for Rs. 25,60,000/- on 17.02.2014, and the sale considerations were paid between 04.08.2011 to 08.12.2011 (much before the sale of the original property).

The assessee also entered into a Construction Agreement on 25.02.2014 to complete the construction of an unfinished flat for a total consideration of Rs. 51,65,000/-. This consideration was paid during 08.12.2011 to 16.02.2014.

It is thereafter that the assessee filed his belated Return of Income u/s. 139(4) of the Act and claiming exemption u/s. 54 (restricted to Rs. 23,17,183/-).

The Assessing Officer denied the benefit of Section 54 as the assessee failed to deposit the unutilized amount of capital gain in a separate account and also did not file the Return of Income as prescribed u/s. 139(1) of the Act.