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2021 (9) TMI 1221 - AT - Income TaxExemption u/s 54 - denial of claim on purchase of property abroad - Scope of amendment to Act - investment made in purchasing the residential house outside India prior to the amendment to section 54 vide Finance Act, 2014 - CIT(A) allowing the benefit of exemption, placed reliance on the judgment of Leena Jugalkishor Shah v. ACIT [2016 (12) TMI 351 - GUJARAT HIGH COURT] - HELD THAT:- Amendment introduced in Section 54 of the Act vide Finance Act, 2014, which mandates purchase or construction of residential house in India, is prospective in nature operational only with effect from 1st April, 2015 i.e., Assessment Year 2015-16 and it will not affect the eligibility of claim in respect of investment made outside India prior to such amendment. In the present appeal, the investment in purchase of residential house in UK was made in July, 2013 and as such the claim of exemption u/s 54 of the Act in respect of such investment is allowable. Accordingly, we find no reason to take a view different from the view taken by the Ld. CIT(A) on the issue and we uphold the same. The grounds raised by the Department are dismissed. Disallowance of expenses claimed by the assessee towards cost of improvement - HELD THAT:- Costs incurred towards stamp duty and registration of the gift in the name of the assessee was an essential pre-condition for the purpose of obtaining the legal title of the property and its further sale - charges incurred for conversion of leasehold to freehold also had to be incurred for the purpose of enhancing the sales consideration value of the property sold and, therefore, it can be safely concluded that the impugned expenditure was a legitimate cost of improvement. We are of the considered opinion that cost of improvement is of wide amplitude and it would take into its fold all kinds of expenses incurred for the improvement of the impugned property. Therefore, we set aside the order of the Ld. CIT(A) on the issue and direct the Assessing Officer to allow the claim of assessee
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