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2020 (1) TMI 54 - HC - Income TaxExemption u/s 54F - Single Judge held that the appellant was entitled to withdraw the amount deposited in the Capital Gains Account subject to deduction of tax applicable to the case in hand - HELD THAT:- The proviso to sub-section (4) of Section 54F carves out an exception to sub-section (4) of Section 54F of the said Act which deals with two contingencies - (i) where the amount deposited in Capital Gain Scheme Account is wholly utilized for the purchase or construction of a new asset within the period specified in sub-section (1) of Section 54F of the said Act; and (ii) where only a part of the said amount is utilized for the purchase or construction of a new asset. The next part of the proviso itself lays down that when the amount deposited in the Scheme is utilized only partly for the purchase or construction of a new asset, the amount by which the amount of Capital Gains arising from the transfer of the original asset not charged under Section 45 on the basis of the cost of the new asset as provided in clause (a), or as the case may be, of clause (b) of sub-section (1), exceeds the amount that would not have been so charged, had the amount been actually utilized by the assessee for the purchase or construction of a new asset within the period specified in sub-section (1) of Section 54F been the cost of the new asset, shall be chargeable under Section 45 as income of the previous year in which the period of three years from the date of transfer of the original asset expires. If only a part of the amount deposited in the Capital Gains Account Scheme is utilized for the construction or purchase of a new asset within the specified time, income tax is chargeable on the unutilized amount. That is why the learned Single Judge, by the impugned order, has directed that the appellant is entitled for withdrawal of the amount deposited under sub-section (4) of Section 54F of the said Act subject to deduction of tax applicable. No error in the view taken by the learned Single Judge as, on its plain reading, the interpretation of the proviso to sub-section (4) of Section 54F of the said Act made by the learned Single Judge is correct.
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