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Ms Dhun Jehan Contractor, C/o. K.K. Lalkaka And Co. Versus Income Tax Officer (International Taxation)

2015 (8) TMI 316 - ITAT MUMBAI

Disallowance of exemption in respect of capital gains u/s 54 as earned on sale of residential property - whether the deduction under section 54 is allowable in respect of the investment made in the residential property outside India for the assessment year under consideration? - Held that:- Following the order of the co-ordinate bench of the Tribunal in the case of "Mr. Girdhar Mohanani & Mrs. Varsha Girdhar [2015 (8) TMI 212 - ITAT MUMBAI] wherein held as during the year under consideration, as .....

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the assessee. - ITA No. 7058/M/2013 - Dated:- 13-5-2015 - R C Sharma, Am And Vijay Pal Rao, JM,JJ. For the Appellant : Shri K K Lalkaka, AR For the Respondent : Shri Love Kumar, DR ORDER Per: Vijay Pal Rao: This appeal by the assessee is directed against the order dated 18.05.2011 of CIT(A) for the assessment year 2008-09. The assessee has raised the following grounds in this appeal. "1. On the facts and in the circumstances of the case and in law, the learned CIT (Appeals) has erred in sus .....

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of residential property although all the requisite conditions laid down in section 54 of the Act were duly fulfilled. 3. On the facts and in the circumstances of the case and in law, the learned CIT (Appeals) has erred in not dealing with the additional Grounds of Appeal relating to provisions of Article 24 being non-discrimination clause containing Double Taxation Avoidance Agreement with Australia which categorically states that nationals of a contracting State shall not be subjected in other .....

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of deduction under section 54 in respect of the capital gain invested for purchase of residential house outside India. The assessee sold a flat No.2.1, Spenta Coop Housing Society, B.G. Kher Marg, Mumbai and earned capital gain of ₹ 1,45,41,080/-. The assessee has purchased a residential property outside India in Australia being flat No.Unit G01, 1 Danks Street West, Port Melbourn, and claimed exemption under section 54 of the Income Tax Act. The Assessing Officer (AO) has disallowed the .....

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his Tribunal in the case of Leena J. Shah. Accordingly, the Ld. CIT(A) has confirmed the action of the AO in disallowing the deduction under section 54. 4. We have heard the Ld. A.R. as well as the Ld. D.R. and considered the relevant material on record. Since the facts relevant to this issue are not in dispute and therefore the only issue arises for our consideration and adjudication is whether the deduction under section 54 is allowable in respect of the investment made in the residential prop .....

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authorities below as well as the decision of Ahmedabad Benches of this Tribunal in the case of Leena J. Shah. 6. Having considered the rival submissions as well as the relevant material on record, we find that a similar issue has already been decided by the coordinate bench of the Tribunal in the case of Mr. Girdhar Mohanani & Mrs. Varsha Girdhar in ITA Nos.4591 & 4592/Mum/2013 decided on 06.05.15 and the relevant finding in paras 4 to 9 is as under: "4. We have considered rival con .....

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at CIT(A) has already considered the decision in the case of Dr. Girish M. Shah, Mrs.Prema P. Shah, Leena P. Shah, wherein it was held that exemption is permissible, even if investment in new residential house is made outside India. 6. On the other hand, ld. AR relied on the decision of Bangalore bench of the Tribunal in the case of Vinay Mishra, 141 ITD 301, wherein it was held that provisions of Section 54F does not suggest that new residential house acquired should be situated only in India. .....

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icable in respect of house acquired outside India. Similarly, the Chennai Bench of the Tribunal in case of N.Ranganathan, 33 ITR (AT) 444 held that the profit on sale of property used for residential house (foreign house property) acquired outside India is eligible for exemption u/s.54. However, no contrary decision of Tribunal or Hon ble High Court was brought to our notice suggesting that exemption will not be available in case residential house is acquired outside India. 7. The Finance (No.2) .....

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uch prior to the amendment so brought in Finance (No.2) Bill, 2014. There is no reason to decline exemption u/s.54 during the A.Y.2010-11 under consideration. 8. The provisions contained in sub-section (1) of section 54 of the Income-tax Act, before its amendment by the Act, inter alia, provided that where capital gain arises from the transfer of a long-term capital asset, being buildings or lands appurtenant thereto, and being a residential house, and the assessee within a period of one year be .....

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