INCOME TAX ACT, 1961

Section 54F

Capital gains - Deduction under section 54F - No deposit in Capital Gains Account Scheme account - Amount not unlisted in construction of house either

AO during assessment proceedings noted that assessee had claimed exemption under section 54. It was further noted that assessee had received capital gain which was not actually utilized for purchasing of new assets, but was advanced to one company on interest basis. For availing exemption under section 54F, the concerned return of income under section 139(1) should have been filed within the time stipulated under section 139(1). However, no return of income was filed under section 139(1). As per condition, the unutilized capital gain should have been deposited in a specified capital gain scheme. Such deposits should have been made before furnishing return of income under section 139(1). AO declined the claim of exemption under section 54F. CIT(A) confirmed the action of AO Held: When return of income was filed by assessee the entire amount which was subject to capital gain tax was not utilized for the purpose of construction of new house nor were the unutilized amount deposited in the notified bank account in terms of section 54F(4) before filing of return of income. AO had taken into account all amounts utilized for construction of the house and therefore, the decision in case of Humayun Suleman Merchant (2016) 387 ITR 421 (Bom) : 2016 TaxPub(DT) 3850 (Bom-HC) squarely applied to the facts of the present case. AO was, therefore, directed to recompute the claim of deduction under section 54.

Followed:Humayun Suleman Merchant v. CIT and Anr. (2016) 387 ITR 421 (Bom) : 2016 TaxPub(DT) 3850 (Bom-HC) CIT v. Rajesh Kumar Jalan. (2006) 286 ITR 274 (Gau-HC) : 2006 TaxPub(DT) 1793 (Gau-HC)

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :

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