Mohamed Akbar Vs ITO (ITAT Chennai)
Tribunal Restricts Addition – Entire ₹5 Cr Gain Cannot Be Taxed Again- Only Balance Left in CGAS After 3 Years Taxable; Only Unutilised Capital Gain of ₹1.3 Cr Taxable- AO Erred in Adding Entire Capital Gains
Assessee sold inherited property in July 2011 for ₹5 crore & claimed exemption u/s 54 by depositing ₹2.5 crore in Capital Gain Accounts Scheme with intent to purchase two flats. Due to dispute with builder, he received only one flat (costing ₹1.19 crore) & the balance ₹1.30 crore remained unutilised beyond 3 years. AO, in reassessment u/s 147 r.w.s. 144, denied exemption, added entire capital gains & also levied penalty u/s 271(1)(c). CIT(A) upheld penalty.
Before Tribunal, Assessee argued that there was no concealment—funds remained in capital gain account till 2021 & were never misused. He had paid full taxes with interest (₹36.68 lakh) & penalty of ₹76.55 lakh, showing bona fides. He contended that only the unutilised portion of ₹1.30 crore should be taxed in AY 2015-16, not the entire capital gain, since Sec. 54 deems only the unutilised sum as income after 3 years.
Tribunal held that AO erred in adding the entire capital gains again; only the unutilised portion of ₹1.30 crore should be brought to tax in AY 2015-16. Since Assessee had already admitted & paid taxes, addition was restricted accordingly.
