Satishchandra Jagdishchandra Gugale Vs ITO (ITAT Pune)
The ITAT Pune allowed the assessee’s appeal for AY 2014-15 and granted deduction under Section 54F of the Income Tax Act despite partial non-deposit of capital gains in the Capital Gains Account Scheme before filing the return. The assessee had sold a plot for ₹3.21 crore and invested the entire sale consideration in purchase of a residential flat worth ₹4 crore within the prescribed period, though only ₹2.25 crore was deposited in the specified account before filing the return. The Assessing Officer disallowed ₹91.45 lakh for non-deposit, which was upheld by CIT(A)/NFAC. Relying on the Karnataka High Court ruling in CIT v. K. Ramchandra Rao, the Tribunal held that Section 54F(4) applies only where the sale consideration is not utilized within the stipulated period. Since the entire consideration was invested within time, the legislative intent stood fulfilled. The disallowance was deleted and the deduction allowed.
I. Chronological Date-Wise Events
Date. Event
14.03.2014. Sale consideration of 3,21,00,000 received
18.03.2014 Transfer of original asset (plot of land)
23.01.2015 Return of income filed declaring ₹17,18,490
Before filing ROI
₹2,25,00,000 deposited in Capital Gain Account Scheme (CGAS)
25.02.2015 Purchase of residential flat for ₹4,00,00,000
Scrutiny under CASS
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