INCOME TAX ACT, 1961

Section 54F

Capital gains - Exemption under section 54F - Unutilised amount in CGAS -

Assessee sold an immovable property held by him and out of the sale consideration received by him, he deposited a sum in Capital Gain Account Scheme, 1988 and claimed exemption under section 54F. Assessee purchased premises which was before expiry of three years from the date of transfer of the capital assets. The notice which was subject matter of challenge by assessee was issued with a view to bring unutilized capital gains to tax. Effect of notice was that unutilized amount after the expiry of three years from the date of transfer of original capital asset was proposed to be subjected to tax under section 45. Assessee contended that once part amount was utilized then balance amount in CGAS was not leviable. Held: The proviso to sub-section (4) of section 54F carves out an exception to sub-section (4) of section 54F which deals with two contingencies where the amount deposited in Capital Gain Scheme Account is wholly utilized for the purchase or construction of a new asset within the period specified in sub-section (1) of section 54F and where only a part of the said amount is utilized for the purchase or construction of a new asset. If only a part of amount deposited in Capital Gains Account Scheme was utilized for the construction or purchase of a new asset within the specified time, income tax is chargeable on the unutilized amount.

REFERRED :

FAVOUR : Against the assessee

A.Y. :

SUBSCRIBE FOR FULL CONTENT