Capital gains

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

19 March 2014 The assessee sold his house property in the F.Y. 2008-09 and earned a capital Gain on it. The assessee decided to purchase new house for claiming exemption U/S 54 and accordingly deposited money under CGAS before filing the return of income for A.Y. 2009-10.Subsequently assessee changed his mind and cancelled his plan to purchase a new house, withdrew CGAS amount in F.Y. 2009-10 and offered whole amount of Capital Gain for taxation in A.Y. 2010-11. The AO taxed the amount in A.Y. 2010-11, however issued Notice U/S 148.

Which would be the appropriate year to tax this capital gain amount ?

Also whether Farm house constructed on Agricultural land is treated as Residential House for counting the limit of two residential houses for claiming exemption U/S 54F.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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19 March 2014 it should be chargeable in AY 2009-10.

the leeway for taxing in subsequent is provided only where the plan was to purchase/construct the house and the assessee was unable to do so within three years and the amounts continued to remain the CGAS account. in such case the gains are taxed in the year in which the third year ends.

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Querist : Anonymous

Querist : Anonymous (Querist)

19 March 2014 Thanks a lot Nikhilji. Yes I agree, since the amount under CGAS was withdrawn by the assessee, the Gain would be taxed in the year in which it was originally earned.

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