As per the Capital Gain Accounts Scheme 1988, a capital gain account is to be opened for claiming exemption from capital gain tax u/s 54. There are two types of accounts under this scheme. Account A and Account B; Account is a savings account and Account B is a FDR account. As per para 7(2) of the scheme " A depositor having a deposit in account-B may, at any time, if he so desires, apply in Form-B or as near thereto as possible, together with his deposit receipt, for transfer of the amount standing to his credit in account-B to his deposit in account-A opened under the same section of the Act under which the said account-B was opened and the request of the depositor may be accepted subject to the other provisions of this Scheme."
As per my view account B can be freely converted to account A as per this para by filing form B, however bank is insisting on filing form B as well as Form G for closure of account B and for filing form G permission of assessing officer is necessary.
Whether the Bank is correct in law? The scheme itself has provided separate provisions for conversion of account B to A and vice versa, then whether para 13 of closure of account can be comibined with para 7 conversion of account and will this conversion be regarded as closure of account B and permission of AO is compulsory?
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