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TMI Blog2011 (11) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 54F. Further assessee was not having option to purchase or construct house as he owned one residential flat on the date of transfer of asset and had acquired new asset on 19th February cannot in any way limit the scope of exemption under 54F - The amount deposited by the assessee in Capital Gains Scheme is also a deemed cost of new asset. In case of non-utilization of such deposit, the amount will be taxable as per proviso to sub-section (4) of Section 54F. - Decided against the revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... ount deposited as FDR under Capital Gains Scheme. Vide reply dated 21st January, 2007, it was submitted that as the entire amount of net consideration was not utilized by the assessee for purchase or construction of new house before furnishing the date of return of income, it had been deposited before the due date of furnishing the return in Capital Gains Account Scheme and proof of such deposit was also enclosed and, thus, the amount so deposited is also eligible for exemption and this deposit is in accordance with Section 54F. Ld. Assessing Officer after reproducing the Section 54F has observed that as per provisions of Section 54F, the assessee can purchase a residential house within one year from the date of transfer of long-term capita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al before the CIT (A) who has allowed the claim of the assessee relying upon the statutory language. The department is aggrieved, hence, in appeal. 4. After narrating the facts, relying upon the observations of the Assessing Officer, it was pleaded by the learned DR that the assessee had utilized the part of the amount of the net sale consideration of residential plot in purchase of flat on 19th February, 2005. Thereafter, the assessee was not eligible to get any further exemption u/s 54F despite the deposit made under Capital Gains Scheme Account. Thus, it was pleaded by the learned DR that CIT (A) has wrongly allowed the relief to the assessee and the order of the CIT (A) on this issue should be reversed. 5. On the other hand, relying u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the new asset bears to the net consideration, shall not be charged under section 45: Provided that nothing contained in this sub-section shall apply where-- (a) the assessee,-- (i) owns more than one residential house, other than the new asset, on the date of transfer of the original asset; or (ii) purchases any residential house, other than the new asset, within a period of one year after the date of transfer of the original asset; or (iii) constructs any residential house, other than the new asset, within a period of three years after the date of transfer of the original asset; and (b) the income from such residential house, other than the one residential house owned on the date of transfer of the original asset, is chargeable un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be income chargeable under the head "Capital gains" relating to long-term capital assets of the previous year in which such new asset is transferred.] (4) The amount of the net consideration which is not appropriated by the assessee towards the purchase of the new asset made within one year before the date on which the transfer of the original asset took place, or which is not utilised by him for the purchase or construction of the new asset before the date of furnishing the return of income under section 139, shall be deposited by him before furnishing such return [such deposit being made in any case not later than the due date applicable in the case of the assessee for furnishing the return of income under sub-section (1) of section 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Omitted by the Finance Act, 1992, w.e.f. 1-4-1993.]" 7. Sub-section (4) of Section 54F describes that what will be the deemed cost of new assets. It describe that the amount of net consideration which is not appropriated by the assessee towards purchase of new asset made within one year before the date on which the transfer of original asset took place or which is not utilized by him for the purchase or construction of new asset before the date of furnishing the return of income u/s 139 shall be deposited by him before furnishing such return in an account in any bank or institution as may be specified in and utilized in accordance with any scheme which the Central Government may, by notification in the Official Gazette, framed in this beha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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