2026 (2) TMI 1242

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....or A.Y. 2017-18. 2. The assessee has taken the following grounds of appeal: "1. The orders passed by lower authorities is invalid, bad in law and required to be quashed. 2. Ld. JCIT(A) erred in law and on facts in disallowing deduction u/s. 54F of Rs. 391661/- ignoring submission and documentary evidence submitted by appellant. 3. Initiation of penalty proceedings u/s. 270A of the Act is unjustified. 4. Appellant craves leave to add/alter grounds of appeal." 3. The brief facts of the case are that the assessee, Shri Sumit Harishbhai Bhagchandani, filed his return of income for Assessment Year 2017-18 on 30.10.2017 declaring total income of Rs. 2,31,53,340/-. The return of income included long-term c....

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....id amount and completed the assessment by assessing total income at Rs. 2,35,45,018/-. 6. Aggrieved by the assessment order, the assessee carried the matter in appeal before the Commissioner of Income-tax (Appeals). Before the CIT(Appeals), the assessee raised the ground that the Assessing Officer erred in partially disallowing the claim of deduction under section 54F of the Act by treating the deposit made in the Capital Gains Account Scheme as not fully forming part of the cost of the new asset. The assessee submitted that that the Capital Gains Account Scheme is a statutory relief provided when the cost of the new asset is not fully determined or construction is not completed and that the entire amount deposited therein should be trea....

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....ruction and the amount deposited in the Capital Gains Account Scheme. It was submitted that the Capital Gains Account Scheme is a benevolent provision introduced to grant relief to taxpayers who are unable to complete construction before the due date of filing of return, and that such deposit represents utilization of net consideration. The ld. counsel contended that the Assessing Officer erred in treating the deposit under the Capital Gains Account Scheme as merely preserving eligibility and not as forming part of the cost of the new asset. The ld. counsel for the assessee submitted that that the assessee had in facts spent an amount even more than the amount of Rs. 2,25,00,000/- deposited in the capital gains account (and had in fact the ....

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....the computation mechanism prescribed under section 54F(1) of the Act. 12. In the present case, the figures are undisputed. The net consideration attributable to the assessee is Rs. 3,82,50,000/-. The capital gain computed is Rs. 3,76,29,042/-The total amount considered by the assessee as cost of the new asset, comprising actual expenditure of Rs. 33,36,605/- and deposit of Rs. 2,25,00,000/- in the Capital Gains Account Scheme, aggregates to Rs. 2,58,36,605/-. On application of the statutory formula, the deduction allowable works out to Rs. 2,54,44,944/-, leaving an excess claim of Rs. 3,91,661/-. 13. We find that the Assessing Officer has neither denied the benefit of section 54F of the Act nor disputed the eligibility of the assessee....