Ramsinhji Meraji Vanzara Vs ITO (ITAT Ahmedabad)
54B relief can’t be denied for non-deposit in CGAS when cheques issued before due date: ITAT grants full exemption
ITAT Ahmedabad allowed assessee’s appeal & directed grant of full deduction u/s 54B. Assessee had sold agricultural land & purchased new agricultural land on 14-08-2019, within the statutory period, by issuing cheques for entire consideration on the date of registered purchase deed. AO restricted deduction to ₹1.53 lakh on ground that balance amount was not deposited in Capital Gains Account Scheme (CGAS) before due date u/s 139(1) & was paid later through post-dated cheques; CIT(A) upheld the disallowance treating CGAS requirement as mandatory.
Tribunal held that where reinvestment in eligible agricultural land within prescribed time is undisputed, issuance of cheques on date of purchase deed with sufficient bank balance constitutes utilisation of capital gains, & mere non-deposit in CGAS is only a procedural lapse, not fatal to claim. Relying on several High Court & Tribunal decisions, ITAT ruled that substantive compliance prevails over procedural requirement & allowed entire exemption u/s 54B, deleting disallowance of ₹28.95 lakh
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
This appeal has been filed by the assessee against the order dated 06.06.2024 passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, [hereinafter referred to as “Ld. CIT(A)” in short], under section 250 of the Income-tax Act, 1961 [hereinafter referred to as “the Act” in short] for the Assessment Year 2018-19
