Law:

Section:

Section 54, read with section 139, of the Income-tax Act, 1961 - Capital gains - Profits on sale of property used for residence - Assessment year 2006-07 - Assessee sold her house property on 13-1-2006 while filed her return on 28-3-2007 claiming deduction under section 54 on ground that she had purchased another property jointly on 2-1-2007 for higher sum - Assessing Officer declined said claim - One of grounds was that assessee had failed to purchase house property before due date of filing return of income under section 139(1), i.e., prior to 31-7-2006 - According to assessee, due date of filing return of income in her case was not as specified in section 139(1) but as specified in section 139(4) i.e., 31-7-2007 - Whether due date for furnishing return of income as per section 139(1) is subject to extended period provided under sub-section (4) of section 139 and, if a person had not furnished return of previous year within time allowed under sub-section (1), assessee could file return under sub-section (4) before expiry of one year from end of relevant assessment year - Held, yes - Whether, therefore, section 54 deduction could not be denied to assessee on this count - Held, yes [In favour of assessee] FACTS The assessee sold her house property for Rs. 45 lakhs on 13-1-2006 and filed her return on 28-3-2007 claiming deduction under section 54 since she had purchased another property jointly with her father-in-law on 2-1-2007 for Rs. 95 lakhs. The assessee was served with a notice under section 142(1), as to why the amount deducted be not added to her income as long-term capital gain, as she had failed to deposit the amount in Capital Gain Account Scheme and also failed to purchase house property before the due date of filing the return of income which was 31-7-2006 as per section 139(1). The assessee, however, contested that she was not liable to deposit the amount in Capital Gain Deposit Scheme and that the due date of filing the return of income-tax was not as specified in section 139(1) but as specified in section 139(4), i.e., 31-3-2007. The Assessing Officer declined the claim and returned finding that the assessee had concealed her particulars of…

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