Capital gain on residential house property

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

08 September 2015 can any one tell me that if an individual has long term capital gain on residential house property, and amount has not been deposited in CGAS before due date of filling return and return under sec. 139(1) has been filled, then what is the remedy to save tax other than CGAS if i want to purchase a house within next 2 years from year of sale. or whether can i deposit such CG amount in CGAS now also before filling of revised return ??

CA Vap Patel

CA Vap Patel (Expert)
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08 September 2015 You don't have any option rather than paying tax on this capital gain. CGAS scheme was formed with the intention that if assessee doesn't buy new house before filling return of income then he should deposit the same in CGAS scheme. SO if you haven't deposited before filling return of income than you have no choice but to pay tax. You may write letter to AO in this regards. He may help you.

Querist : Anonymous

Querist : Anonymous (Querist)

09 September 2015 Thank you Sir for your reply,
but I had read Case-laws of:
1) BANGALORE BENCH in case of NIPUN MEHROTRA V. ACIT, 110 ITD 520,
2) GAUHATI HIGH COURT in case of RAJESH KUMAR JALAN (SUPRA)
and in these cases the court had taken a view that if amount of capital gain is deposited in CGAS before filing of belated return u/s 139(4) also then also he is eligible for exemption of section 54.
So,can I consider this view?

CA Vap Patel

CA Vap Patel (Expert)
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09 September 2015 Technically speaking, I have gone through two three case law before answering your query and all of them belongs to Tribunal of Jodhpur and of Ahmedabad etc and in reality asseessing officer of Mumbai will not agree on outcome of tribunal of any other states except for Mumbai ITAT and Decision of High Court of any state and Supreme court. In your case as you have mention that Gauhati HC has favoured assessee then you can rely on it and claim the exemption. For Now you should first deposit amount in CGAS scheme as soon as possible and file your return thereafter and be prepare for any scrutiny if any comes in future. On personal point i still believe that exemption should not be granted. Because Law clearly states that " Amount of capital Gain should be deposited in CGAS scheme before filing return of income or before due date of furnishing return of income whichever is earlier" In such case there is no room for error or loopholes stays.

CA Vap Patel

CA Vap Patel (Expert)
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09 September 2015 I have gone through the case of Gauhati High Court as stated by you. Some facts of the case are totally different from your one as in that case actual sale consideration was not received before filing return of income hence it was not feasible for assessee to deposit that monry in CGAS scheme. Hence court allowed the exemption. If you think same has happned with you also then you can rely on it and take the exemption.