Q. > Please Help: Capital Gain issue

363 views • Question added Jun 29, 2016 • Income Tax • By ESWARA RAO , CA , Vijayawada

Dear sir,
My client has purchased Ac shed for an amount of Rs 2.51 lacs in the year 95-96. In the year 97-98 he has demolished the Ac Shed and constructs a two floor building with an amount of Rs 6.17 lacs. During the Financial year 2013-14 the Assessee has sold the above said property and we arrive Long term Capital Gain Rs 24.56 lacs on the above said transaction and we deposit an amount of Rs 26 lacs in Capital gain scheme within the Due date . The assessee has failed to utilize the said capital gain for purchase and construction of new house and he also paid advance Tax on capital gain deposit amount in the month of June 2016 for the first quarter. Subsequently the case is selected for scrutiny and the income tax officer wants to make additions for an amount of Rs 1.50 lacs in capital gain and to pay tax amount of Rs 40,000/- . We replied that since we deposit excess amount in Capital gain and the same (i.e Rs 26 lacs) is offered to tax in the financial year 2016-17 and we also pay advance tax on such capital gain. Please suggest me or provide any case law on non levy of income tax on the additions made in the scrutiny assessment because we deposit excess amount in capital gain scheme .