Deposit u/s 54 f

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This query is : Resolved

Shankar Rao (Querist)

05 January 2012 Dear all

My friend has sold a site during March 2009. To claim exemption he has approached the bank and expressed his intension of depositing under capital gain scheme. The Bank has has accepted the deposit of Rs. 550000 and issued a deposit receipt mentioning clearly " Deposit made under Capital gain sceme. Now the case is selected for scrutiny and the A O has verified in detail and noticed that assessee has used ordinary term deposit form while opening the account.
Now the A O has withdrawn the exemption claimed by the assessee on the ground that the assessee has not used proper application form. kindly let me know whether the A O is justified in with drawing the expemtion ? or My friend has any ways to defend himself. The A O is arguing that to claim exemption assessee should deposit in eather in deposit A A/c Deposit B A/c and Using of ordinary deposit form does not amounts to deposit under capital gain scheme.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

05 January 2012 The Account Opening form is immaterial here. Obtain a certificate from the Bank that the amount has been deposited in the Capital Gains A/c only.
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A/c opening form is taken by the bankers for internal purposes only. Had the assessee used Capital Gains A/c opening form and had not deposited a single rupee in that a/c will the AO accepts the exemption ?
No, as deduction is based on the amount deposited and not merely on the Account Opening Form.
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