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2018 (9) TMI 873 - AT - Income TaxExemption u/s 54 - LTCG - investment outside India - Profit on sale of property used for residence - capital gains arising from the sale of a residential house in India, and the same invested in another house property in Hong Kong - Held that:- The words ‘constructed a residential house’ has been substituted with the words ‘constructed, one residential house in India’ by Finance Act, 2014 w.e.f 01/04/2015. Upon careful analysis of the same, we find that the words in India has been brought to the statute w.e.f. 01/04/2015 only and prior to that there was no restriction as such with respect to the location of the property before the aforesaid deduction could be claimed by the assessee. The stated amendment, in our opinion, being substantive in nature, was only prospective in nature and was not applicable for the assessee at the relevant point of time, the AY being 2012-13. Prior to the aforesaid amendment, in our view, there was no bar for the taxpayer making investments outside India in residential house property to get the benefit of deduction u/s. 54 provided other conditions are fulfilled. As decided in Leena Jugalkishor Shah Vs. ACIT [2016 (12) TMI 351 - GUJARAT HIGH COURT] prior to the amendment the only stipulation was to invest in a new residential property and there was no scope for importing the requirement of making such investment in a residential property located in India. We find that the stipulations as to investment, in Section 54 & 54F are pari-materia the same. The revenue has not disputed that fact that the investment in Hong Kong has been made by the assessee in a residential property out of the impugned capital Gains. In view of the stated position, we are of the considered opinion that the assessee was entitled for the deduction u/s 54 on account of aforesaid investments. We direct Ld. AO to allow the aforesaid deduction u/s 54 to the assessee to the extent of investment made. - Decided in favour of assessee
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