TMI Blog2013 (9) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... on, we are precluded from reading the words "in India" into section 54F of the Act, when Parliament in its legislative wisdom has deliberately not used the word "in India" in section 54F of the Act. - IT Appeal No. 895 (Bang.) of 2012, s.p. no. 124 (Bang.) of 2012 - - - Dated:- 12-10-2012 - Order The order of the Bench was delivered by Jason P. Boaz (Accountant Member).-This appeal and stay petition by the assessee are directed against the order of the Commissioner of Incometax (Appeals)-III, Bangalore, dated June 26, 2012 for the assessment year 2009-10. The facts of the case, in brief, are as under: The assessee is a director of M/s. Marketics Technologies (India) P. Ltd., Bangalore and derives his income from salary, business, capital gains and other sources. The assessee filed his return of income for the assessment year 2009-10 on July 20, 2009 declaring total income of ₹ 1,53,44,940. The return was processed under section 143(1) of the Income-tax Act, 1961 (hereinafter referred to as the Act ) and subsequently taken up for scrutiny by issue of notice under section 143(2) of the Act. In the course of assessment proceedings, it was seen that in the relevan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has further opined that merely because the provisions of section 54F do not mandate that in order to be eligible to claim exemption under section 54F, the investment should be made in a house property in India, it cannot be construed that investment in a house property in a foreign country will make one entitled for exemption. In this view of the matter, the learned Commissioner of Income-tax (Appeals) dismissed the assessee's appeal. Aggrieved by the order of the learned Commissioner of Income-tax (Appeals) dated June 26, 2012, the assessee is now in appeal, it has been contended as under : 1. The order of the Commissioner of Income-tax (Appeals) is opposed to law, facts and circumstances of the case. 2. The Commissioner of Income-tax (Appeals) erred in confirming the denial of exemption from capital gains claimed under section 54F of the Act. 3. The Commissioner of Income-tax (Appeals) failed to appreciate that the appellant has fulfilled all the conditions to claim exemption under section 54F of the Act and hence the denial is unjustified. 4. The Commissioner of Income-tax (Appeals) is wrong in his interpretation of the provisions of section 54F that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in and unambiguous. To support this proposition learned counsel for the assessee relied on a number of decisions/judgments of the hon'ble apex court and various High Courts and more particularly on the decision of the hon'ble Karnataka High Court in the case of Director of Income-tax (International Taxation) v. Mrs. Jennifer Bhide [2012] 349 ITR 80 (Karn) in I. T. A. No. 169 of 2011 wherein, the hon'ble High Court, while considering the issue as to whether an investment in joint names of the assessee and her spouse would preclude the assessee from availing of exemption under sections 54 and 54EC of the Act, held that there is no specific condition in section 54 or 54CC that the investment/construction should be there in the name of the assessee only. He drew our attention to paragraphs 7 and 8 of the judgment, wherein the court held as under (page 84) : 7. Once the sale consideration is invested in any of these manner the assessee would be entitled to the benefit conferred under this provision. In the absence of an express provision contained in these sections that the investment should be in the name of the assessee only any such interpretation were to be placed, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal chose not to follow the said decision in the Leena J. Shah case as there was no ambiguity on a plain reading of the provision of section 54/54F of the Act. It is contended by learned counsel for the assessee that the subsequent decision of the Mumbai Bench of the Tribunal in the case of Mrs. Prema P. Shah and Sanjiv P. Shah v. ITO reported in [2006] 282 ITR (AT) 211 (Mumbai) is a speaking order which goes to the genesis of the provisions, the purpose for which the provisions had been introduced and what is sought to be achieved by these provisions. It is submitted that the Mumbai Bench of the Income-tax Appellate Tribunal has categorically held that if all other conditions prescribed are complied with, exemption under section 54/54F cannot be denied for the reason that the residential house acquired is situated outside India. It was also pointed out by learned counsel for the assessee that another Bench of the Income-tax Appellate Tribunal, Mumbai in the case of ITO v. Dr. Girish M. Shah in I. T. A. No. 3582/Mum/2009 followed the decision in the case of Mrs. Prema P. Shah and Sanjiv P. Shah [2006] 282 ITR (AT) 211 (Mumbai). It was submitted that the provisions of sections ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gued that it is in-built in the provisions of section 54F of the Act that the investment in the new asset should be in India . The learned Departmental representative in support of this proposition placed reliance on the decision of the hon'ble apex court in the case of Oxford University Press v. CIT reported in [2001] 247 ITR 658 (SC) and American Hotel and Lodging Association Educational Institute v. CBDT reported in [2008] 301 ITR 86 (SC). Written submissions in this regard were also filed by the learned Departmental representative. In his rejoinder, learned counsel for the assessee submitted that the decisions relied upon by the learned Departmental representative are distinguishable. It was pointed out by learned counsel for the assessee that both these decisions of the hon'ble apex court (cited supra) interpreted the provisions of section 10(22) of the Act which was later on replaced by section 10(23C) of the Income-tax Act. Such an interpretation, learned counsel for the assessee argued, would not arise for consideration in the present case which dealt with the eligibility for exemption under section 54F of the Act. We have heard both parties and carefully per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aim for exemption could not be denied even on the ground that the assessee had utilised borrowed funds for investment in the said property. In accordance with this view, the hon'ble Tribunal in paragraph 27 of its order held as under (page 223) : 27. In short, we are of the considered view, for the reasons stated hereinabove, the assessee is entitled to the benefit under section 54 of the Act. It does not exclude the right of the assessee to claim the property purchased in a foreign country, if all other conditions laid down in the section are satisfied, merely because the property acquired is in a foreign country. Subsequently, another Bench of the Mumbai, Income-tax Appellate Tribunal in the case of Dr. Girish M. Shah in I. T. A. No. 3582/Mum/2009 dated February 17, 2010 following the decision in the case of Mrs. Prema P. Shah and Sanjiv P. Shah [2006] 282 ITR (AT) 211 (Mumbai) held that the assessee was not to be denied exemption under section 54F of the Act merely on the ground that the purchase/construction of the residential house must be in India and not outside India if all other conditions laid down in the section are satisfied. The latter decision of the Mumba ..... X X X X Extracts X X X X X X X X Extracts X X X X
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