Rachna Jain Vs The ITO (ITAT, Jaipur Bench)
No CGAS Deposit, Yet Section 54F Survives — Investment in New House Within Two Years Is the Substance; Capital Gains Account Is Only the Route When Money Remains Uninvested
Summary: The Jaipur ITAT delivered an important ruling on the recurring controversy surrounding section 54F & non-deposit of unutilised sale consideration in the Capital Gains Accounts Scheme (CGAS). Following the Karnataka HC decision in CIT v. K. Ramachandra Rao, the Tribunal held that where the assessee ultimately purchases the new residential property within the two-year period prescribed u/s 54F(1), exemption cannot be denied merely because the unutilised consideration was not deposited in CGAS before the due date u/s 139(1). The Tribunal treated compliance with section 54F(4) as procedural in such circumstances & allowed the assessee’s claim.
Facts — ₹68 Lakh Plot Sold & ₹66.33 Lakh Invested in New Flat
The assessee sold a plot situated at Gur Ki Mandi, Rajpur Chhawni, Delhi in September 2014 for ₹68 lakh. The plot had been purchased on 16.02.2000 for ₹42,000. After claiming indexed cost of ₹1,10,560, LTCG was computed at ₹66,89,440.
The assessee thereafter invested in a residential flat at ATS-1, Hamlet, Noida. The total cost of the flat was ₹1.15 crore & it was jointly held with her husband. Based upon their respective contributions, the assessee’s investment was determined at ₹66,32,875, for which she claimed deduction u/s 54F. Consequently, only ₹52,967 was offered as net LTCG.
