closure of capital gain account with SBI, Income Tax

[Rupesh Gupta]

i have  capital gain account  ( 31 lacs) with SBI under RBI capital gain scheme 1988. It was opened in May 2008 for the capital gain i had by sale of a resedential plot, and was supposed to be closed in May 2011 after expiry of 3 years. Somehow i was not able to use any money from this account to purchase / construct any new property.

I had paid the taxes on the intrest accrued every year based on TDS deducted and intrest statement given by bank to me. I have money both in account A ( 5.7 lacs) and 33 acs( in account B, SDR and TDR).

I had approached my assessing officer at ITO for his clearance on form G, but he did not sign saying that i had to clear my taxes first. As taxes are tune of 4 lacs , i am not in position to arrange this amount. I had requested SBI to deduct money from my capital gan account, but they refuse. Also, my request to transfer the intrest accrued in this account is not being considered. What is the law on this? How i am supposed to pay the taxes. It is very strange that i am not able to utilise even the intrest accrued on which i had already paid the taxes? Also , problem is that bank officers and assessing officer are not quite aware what to do and are playing safe. Suggest a way out??

Posts / Replies

[MOHAN S]

Dear Mr. Rupesh,

I am able to appreciate your predicament. The law is clear that if the amount invested in "Capital Gains Account" is not utilised it will be treated as income of the year in which the three year time period expires. The bank or the I.T Officer not acting on this is only out of ignorance and unfortunately no one can prescribe a Rule for every possible siituation. The Assessing officers today are pathetically ingorant of law or not willing to act proactively in such situation. Being a Chartered Accountant with more than 30 years of experience I find this attidude of Officers as sad and alarming. 

Now, my suggestion to you would be to approach the senior officer of your assessing officer ( Either Addl CIT or CIT) and explain the situation and request them to instruct your A.O to release the account with a condition to the bank to retain and pay the tax dues in your account. This could be easily done by any officer who has some common sense. But unfortunately none of thepresent day officers seem to have common sense. Better luck to you.

[vaibhav limaye]

Hi Rupesh,

Any luck further ? what you did finally?  I have same issue. :(

Please guide.

Thanks in advance.

Vaibhav