Chandra Poojari ORDER
Chandra Poojari, Member (A)
1. This appeal filed by the assessee is directed against order of the Ld. CIT(A)-12, Bengaluru dated 30.3.2019. The assessee has raised following grounds of appeal:
1. The order passed by the Learned Commissioner of Income Tax (Appeals) in the case of the appellant, in the facts and under the circumstances, is grossly opposed to law, erroneous, and unsustainable.
2. The Learned Commissioner of Income Tax (Appeals) was grossly in error in holding that the appellant was not entitled to the benefit of exemption u/s. 54 of the Act in respect of the sum of Rs. 2.59 Crores that was invested in the construction of the new residential house after the due date for filing of the return of income u/s. 139(1).
3. The Learned Commissioner has grossly erred in not following the ratio laid down by the Hon'ble High Court of Karnataka in its judgment in the case of Shri. K. Ramachandra Rao (ITA No. 47/2014, 46/2014, 494/2013 and 495/2013) to hold that where the intention was not to retain cash but to invest in construction of a new residential house, the appellant cannot be denied the benefit of exemption u/s. 54 for not depositing the unutilized capital gain in the capital gains account, so long as the construction of the residential house is complete within the time permissible u/s. 54(1) of the Act.
4. Without prejudice, and having regard to the meaning of the expression "a residential house" appearing in Sec. 54(1) as clarified by various courts including the jurisdictional High Court of Karnataka, the Learned Commissioner of Income-tax (Appeals) was in error in holding that the appellant was not entitled to the benefit of the exemption u/s. 54 in respect of the new residential house constructed in Bangalore as well as the residential house purchased in Chicago, USA within the time stipulated under the provisions of Sec. 54(1).
2. In this case, the assessee has claimed exemption u/s. 54 of the Income-tax Act, 1961 ['the Act' for short] on the following reasons:
1. The total sum Rs. 7,59,92,601/- has been invested in the new asset i.e. residential house under construction within the due date u/s. 139(1) i.e. 31.7.2014 as opposed to the Capital Gains of Rs. 10,80,96,500/- which actually had to be invested.
2. The balance Capital Gain of Rs. 2,59,03,899/- which had to be either invested in the construction of residential house or deposited in the Capital Gain account, could not be done in view of the tax withheld by the buyer of the property, which was yet to be refunded by the department.
3. Application u/s. 119(2) of the IT Act, 1961 was made to the CBDT on 01.2.2014 i.e. before the filing of the return of income for condonation of delay in making the investment in the new residential house which was a pre-condition for the claim of u/s. 54.
4. Deposited a sum of Rs. 3.30 crores on 15.6.2015 in the Capital Gains account when the refund claim for 2014-15 was received.
5. Since, the delay in the investment in the new asset for claim of exemption u/s. 54 was attributable beyond the control of the assessee it was requested that the exemption may be allowed.
3. The Ld. A.R. for the ass........