Section 54F do not stipulate purchase of new asset from sale proceeds of original capital asset only
Case Law Details
Case Name : CIT Vs Shri Kapil Kumar Agarwal (Punjab & Haryana High Court)
Related Assessment Year :
Courts :
All High Courts Punjab and Haryana HC
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The issue that arises for consideration relates to whether the assessee in order to avail benefit of Section 54F of the Act is required to utilize the amount for the purchase of the new asset from the sale proceeds of the original capital asset only.
Under sub section (1) of Section 54F of the Act, the amount of capital gains exempt under this provision is equal to the difference between the cost of the new asset and the net consideration received from the transfer of the original asset. Where the cost of the new asset is equa
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Finance Act, 1987 had inserted sub section (4) of Section 54F of the Act effective from 1.4.1988. According to sub section (4) of Section 54F of the Act where the amount of net consideration is not utilized for the purchase or the construction of a new residential house, it should be deposited in an account in a specified bank under the Capital Gains Account Scheme, 1988 notified by the Central Government in the Official Gazette. This is required to be deposited by the due date for filing return of income under Section 139(1) of the Act to avail benefit under this provision.
THE WORDS USED ARE THAT MONEY SHALL BE DEPOSITED IN CAPITAL GAINS ACCOUNT SCHEME 1988 BEFORE DUE DATE U/S 139 AND NOT U/S 139(1) WHICH IS THE INTERPRETATION GIVEN BY GUWAHATI HIGH COURT IN RAJESH KUMAR JALAAN’S CASE… AND TILL DATE THE WORDS 139(1) HAS NOT BEEN SUBSTITUTED OR MODIFIED… WHICH WOULD MEAN THAT THE AMOUNT CAN BE DEPOSITED IN CAPITAL GAIN ACCCOUNT SCHEME..TILL DATE PRESCRIBED OF BELATED RETURN.. THAT IS 2 YEARS FROM THE END OF THE PREVIOUS YEAR…
KINDLY CORRECT ME IF I AM WRONG.. dalmia_am@yahoo.co.in