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TMI Blog2024 (10) TMI 1560X X X X Extracts X X X X X X X X Extracts X X X X ..... htly been offered for tax in the respective years of withdrawals but we are unable to concur with the same. The amount parked by the assessee in the CGAS account, which had not been utilized for the purchase or construction of the new residential house within the prescribed period, has to be brought to tax in the previous year, in which the period of three years from the date of the transfer of the original asset expires. As in the present case before us, the assessee had transferred the capital asset: i.e the unlisted shares and securities of HDIPL and had, inter alia, claimed exemption u/s. 54F that was deposited by him in Capital Gain Account Scheme, 1988, therefore, the period of three years from the date of transfer of the aforesaid original asset expires on 29.07.2018, i.e. during the period relevant to A.Y.2019-20. Accordingly, as per the mandate of the 1st proviso to Section 54F(4) of the Act, the amount that was not utilized by the assessee for the specified purpose, for which, the same was deposited in CGAS, 1988, i.e. for the purchase or construction of a residential house can only be brought to tax in Assessment Year 2019-20. As per our aforesaid deliberations the amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The A.O. on a perusal of the details observed that the assessee in A.Y.2016-17 had sold a capital asset on which he had earned LTCG of Rs. 9,90,32,248/-. It was further observed by him that the assessee had deposited a sum of Rs. 6 crore in his bank account opened under the Capital Gain Account Scheme (CGAS), 1988, and had claimed exemption u/s. 54 of the Act. The A.O further observed that the assessee had during the year under consideration, as well as in the immediately preceding and succeeding years made withdrawals from the CGAS account, as under: A.Y Amount withdrawn 2017-18 2 crore 2018-19 3 crore 2019-20 1 crore The A.O. further observed that the assessee had paid taxes on the amounts withdrawn from his CGAS account in the respective years of withdrawal. Also, it was observed by him that the LTCG of Rs. 3,01,89,200/-(supra) was partly set off by the assessee against the Short-Term Capital Loss (STCL) of Rs. 85,76,594/- that was suffered by him during the subject year and the balance amount of LTCG of Rs. 2,16,12,606/- was offered for tax. 4. The A.O taking cognizance of the fact that the withdrawals made by the assessee from CGAS account revealed beyond doubt an attempt on h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ights to withdraw the amount from the Capital Gains Account Scheme and pay taxes on it in installments. 5.3 Upon perusal of the submissions made by the appellant, the assessment order, and the relevant provisions of the Income-tax Act, 1961, the following observations are made: The appellant had deposited Rs. 6 crore in the Capital Gains Account Scheme in AY 2016-17, claiming exemption under section 54F. The appellant withdrew Rs. 2 crore in AY 2017-18, Rs. 3 crore in AY 2018-19, and the remaining Rs. 1 crore in AY 2019-20. Each withdrawal was offered to tax in the respective years. Section 54F(4) states that if the amount deposited in the Capital Gains Account Scheme is not utilized for the purchase or construction of a residential house within the specified period, it shall be charged to tax as income of the previous year in which the period of three years from the date of transfer of the original asset expires. The appellant correctly offered the withdrawn amounts to tax in the respective years of withdrawal, aligning with the provisions of section 54F(4). The appellant relied on several judicial decisions to support his contention that the unutilized amount should be taxed in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount to tax in AY 2019-20 does not alter the fact that, as per the Act, the amount should be taxed in AY 2018-19. There is no double taxation as the correct assessment year for taxing the unutilized amount is AY 2018-19. 5.5 Based on the detailed analysis of the submissions made by the appellant, the provisions of the Income-tax Act, 1961, and the assessment order, it is concluded that the addition of Rs. 1 crore to the total income for AY 2018-19 by the AO is correct and justified. The appellant's grounds of appeal are dismissed. 5.6 The appeal filed by the appellant is dismissed, and the addition of Rs. 1 crore to the total income for AY 2018-19 is upheld. 6. In the result, appeal of the appellant is Dismissed. 6. The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before us. 7. We have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by the Ld. AR to drive home his contentions. 8. Controversy involved in the present appeal, for which, our indulgen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsfer of a capital asset, means the full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer. (2) Where the assessee purchases, within the period of two years after the date of the transfer of the original asset, or constructs, within the period of three years after such date, any residential house, the income from which is chargeable under the head Income from house property , other than the new asset, the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of such new asset as provided in clause (a), or, as the case may be, clause (b), of sub-section (1), shall be deemed to be income chargeable under the head Capital gains relating to long-term capital assets of the previous year in which such residential house is purchased or constructed. (3) Where the new asset is transferred within a period of three years from the date of its purchase or, as the case may be, its construction, the amount of capital gain arising from the transfer of the original asset not charged under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It transpires on a careful perusal of the aforesaid statutory provision that the same contemplates that the net consideration received by the assessee on transfer of its capital asset, which is not appropriated by him 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 utilized by him for the purchase or construction of the new asset before the date of furnishing the return of income u/s. 139 of the Act, shall be deposited by him before furnishing such return of income not later than the due date applicable in his case for furnishing the return of income under sub-section (1) of Section 139 of the Act in Capital Gain Account Scheme, 1988. In case, the amount deposited by the assessee in CGAS, 1988 is not utilized wholly or partly for the purchase or construction of the new asset within the period specified, then the unutilized amount shall be charged u/s. 45 of the Act as income of the previous year, in which the period of three years from the date of the transfer of the original asset expires. Accordingly, a perusal of Section 54F of the Act, reveals that though the assessee is entitled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 crore that was deposited by him in Capital Gain Account Scheme, 1988, therefore, the period of three years from the date of transfer of the aforesaid original asset expires on 29.07.2018, i.e. during the period relevant to A.Y.2019-20. Accordingly, we are of the view that as per the mandate of the 1st proviso to Section 54F(4) of the Act, the amount that was not utilized by the assessee for the specified purpose, for which, the same was deposited in CGAS, 1988, i.e. for the purchase or construction of a residential house can only be brought to tax in Assessment Year 2019-20. 12. As the assessee by preferring the present appeal has sought our indulgence on the limited issue, i.e. as to whether or not, the A.O/CIT(Appeals) are right in law and facts of the case in treating the amount of Rs. 1 crore (supra), which during the subject year was lying in the assessee s CGAS account, 1988 and was withdrawn by him in the immediately succeeding year, i.e. A.Y.2019-20, as his income under the head LTCG for the year under consideration i.e A.Y 2018-19 therefore, we confine and circumscribe our adjudication to the said extent. As per our aforesaid deliberations the amount of Rs. 1 crore (sup ..... 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