Exemption u/s 54f

This query is : Resolved

Keyur (Querist)
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10 January 2012 An assessee had long term capital gain on sale of house of Rs. 1 crore. In that year, he deposited whole Rs. 80 lacs in CAGS for exemption u/s 54F. He deposited 30 lacs in bonds u/s 54EC. (i.e. there was overinvestment)

Eventually the assesse, before filing return of income, utilised Rs. 40 lacs out of CAGS to buy a house....

Since only one property can be purchased u/s 54F, the remaining amount in CAGS cannot be now utilised and hence the assessee offered it for tax at the end of the third year...

However the AO is of the view that since the assessee already purchased the property worth Rs. 40 lacs before filing return of income, he should have offered the remaining amount in CAGS for tax in that year itself and that he used the CAGS as a means to defer tax....

Is the stand of the AO justified.... ?

Keyur

Keyur (Querist)
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12 January 2012 Can someone please help on this querry.... thanks..