No exemption u/s 54F if net consideration not utilized for deposit before due date specified u/s 139(1).

No exemption u/s 54F if net consideration not utilized for deposit before due date specified u/s 139(1).

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No exemption u/s 54F if net consideration not utilized for deposit before due date specified u/s 139(1). 

Assessee is not entitled to exemption u/s 54F where net consideration was not utilized for purposes of deposit in notified bank account in terms of s. 54F(4) before due date specified u/s 139(1).
Capital Gains—Capital gain on transfer of certain capital assets not to be charged in case of investment in residential house—Assessee filed return of income belatedly u/s 139(4)—During scrutiny assessment, AO noticed that assessee had sold certain urban agricultural land—After reducing index cost of acquisition, assessee declared LTCG which was subsequently claimed to be exempted u/s 54F on ground that entire sale consideration was deposited in ‘capital gain account scheme’ prior to/on date of filing of return of income—AO held that s. 54F(4) required that such deposit in capital gain account scheme could not be made later than due date applicable to assessee for furnishing return of income u/s 139(1)—AO accordingly declined to grant exemption claimed u/s 54F on the ground that belated deposits in scheme was not in terms with provisions of Act—CIT(A) confirmed AO’s action—Held, s. 54F(4) enjoins that net consideration received on sale of original asset was required to be appropriated by assessee towards purchase of new assets before furnishing of return of income u/s 139—Alternatively, in event of non-utilization of net consideration towards purchase of new asset, assessee was required to deposit capital gains in specified bank account before due date of filing of return of income u/s 139(1)—In present case, assessee had not claimed any purchase of new asset—Thus, assessee’s claim was required to be weighed on first limb of s. 54F(4) i.e., whether sale consideration was utilized for deposit in designated scheme before date of filing of return of income—In absence of any ambiguity in exemption provision for eligibility, there was no reason to interfere with order of CIT(A) where net consideration was not utilized for purposes of deposit in notified bank account in terms of s. 54F(4) before due date specified u/s 139(1)—Assessee’s appeal dismissed.
HANSABEN PRAVINBHAI PATEL vs. INCOME TAX OFFICER
(2019) 55 CCH 0135 AhdTrib

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