Capital gain

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PRASHANTH PAI K (Querist)
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26 September 2014 One of my NRI client sold a residential house situated at Mumbai during F.Y.2011-12. The property sold was held in joint name with herself and her husband. The LTCG on the property was Rs.40.00 lacs. She invested the capital gain of Rs.20.00 lasc in a residential flat within one month from the date of sale. She also booked one more flat which was under construction. The construction completed recently that is in 2014. She paid the entire amount in instalments to the builder (i.e, within 3 years). Both the new flats are in the joint name of husband and wife.
My query is since she has not deposited the money in capital gain deposit scheme before the due date for filing the return for A.Y.2012-13,whether she is compelled to pay tax if her case is choosen for scrutiny. She filed her return on 05.08.2012 but did not disclose capital gain in the return.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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26 September 2014 when did file the return for this assessment year - AY 2012-13?

PRASHANTH PAI K

PRASHANTH PAI K (Querist)
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26 September 2014 She filed her return on 04.08.2012 , but did not disclose her capital gain in the return.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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26 September 2014 then there is the issue of non-compliance of CGAS requirements.

So there is a good chance for tax demand for this issue since on the date of filing the return, you still had unutilized gains not parked in CGAS.

PRASHANTH PAI K

PRASHANTH PAI K (Querist)
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26 September 2014 Is there any defense, since technically she has full filled the requirement of utilisation within the time specified and she is also NRI

Nikhil Kaushik

Nikhil Kaushik (Expert)
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26 September 2014 well i am unable to find any caselaw for her benefit. The problem here is that she has filed the return before applying the funds. Thats where it is getting stuck

PRASHANTH PAI K

PRASHANTH PAI K (Querist)
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26 September 2014 What about the judgement of Hon’ble Gauhati High Court (in CIT v. Rajesh Kumar Jalan 2006 (8) TMI 126 - GAUHATI HIGH COURT) and ITAT Bangalore (in Shri Nipun Mehrotra v. ACIT (2007 (3) TMI 283 - ITAT BANGALORE-B)), favored the assessee and allowed the exemption wherein the amount was not deposited in capital gain account within the prescribed time limit.Judgement was in respect of section 54F

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