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2014 (11) TMI 1190 - KARNATAKA HIGH COURTLong term capital gain exemption u/s 54F - Held that:- Section 54F(4) is pari materia with Section 54(2). Therefore, what follows is that when the statute prescribes expressly when the capital gain is to be offered to tax. It shall be treated accordingly. If the said amount is deposited in a Nationalized Bank as required under law, in capital gain account the deposit is construed as investment in new asset. Subsequently if the amount deposited is not utilized the entire capital gain or the unutilized capital gain chargeable u/s 45 is to be offered for tax only in the previous year in which the period of three years from the date of the transfer of the original asset expires. Therefore, assessing the said amount for the assessment year 2005-06 when the property is sold on 28-04-2005 is erroneous. Though the assessee purchased a site on 26-09-2005, he could not put up construction because of business exigencies and thus sold the property on 6-10-2006. Immediately thereafter he offered the said amount for tax in the assessment year 2007-08. The authorities erred is assessing the income of the assessee for the assessment year 2005-06 in respect of the capital gain is contrary to law and therefore, it requires to be set aside. - Decided in favour of the assessee.
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