Disallowance of exemption u/s. 54 F

[AriramaNadar Ramakrishnan]

One of my assessee has sold his property on 21.03.2007 and we arrived long-term capital gain amount Rs. 92,67,000/-. But the assessee has filed his return of income on 29.07.2008 and not made any deposit into Capital Gain Account. Also he has purchased new assets of one residential property on 24.08.2007 for Rs. 39,00,000/-, for that, he has executed sale agreement on 20.04.2007 without made any advance amount. In this circumstance, we have claimed exemption u/s. 54 F for Rs. 39,00,000/- as the assessee invested the amount within six month from the date of Transfer. But, the Income Tax Officer has disallowed this and demanded the tax. Now we want justification with case law reference.

AI Summary

Taxpayer Denied Section 54F Exemption for Missing Deadline on Capital Gain Account Deposit and Tax Return Filing An individual sold property, incurring a long-term capital gain of Rs. 92,67,000, and purchased a new residential property for Rs. 39,00,000 within six months. However, they did not deposit the gain into a Capital Gain Account or file the return by the due date, leading to a disallowance of exemption under Section 54F by the tax officer. A discussion ensued about eligibility for the exemption, emphasizing timely investment or commitment of funds before the due date. It was suggested that an appeal could be filed, arguing the funds were committed before the deadline.