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2018 (9) TMI 873

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 b .....

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al:- 1. On the facts and circumstances of the case and in law the Commissioner of Income Tax (Appeals) [CIT(A)] erred in confirming the order of the Assessing Officer [AO] in disallowing the claim of exemption u/s 54 of the Income Tax Act, 1961, being capital gains arising from the sale of a residential house in India, and the same invested in another house property in Hong Kong. 2. The CIT(A) erred in not following the decisions of jurisdictional tribunal which are favour of the Appellant, but chose to follow the decision in case of the order of the Ahmedabad Tribunal and Jurisdictional Tribunal where the issue involved is was with respect to section 54F and not section 54. The assessment for impugned AY was framed by Ld. Income Tax Office .....

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ee was eligible to claim the said deduction. While placing reliance on several judgments of this Tribunal, Ld. AR drew our attention to the fact that the aforesaid decision of Ahmedabad Tribunal has subsequently been reversed by Hon ble Gujarat High Court which demolishes the whole basis of disallowance as taken by the revenue. Per contra, Ld. Departmental Representative [DR], Ms. Pooja Swaroop submitted that if such deductions are allowed, the whole purpose of introducing incentive provisions would get defeated. 5. At the outset, we deem it fit to reproduce relevant statutory provisions as contained in Section 54, as they stood at the relevant time:- Profit on sale of property used for residence. 54.(1)Subject to the provisions of sub-sect .....

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he 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. 6. So far as the decision of Ahmedabad Tribunal rendered in Leena J.Shah as relied upon by the lower authorities is concerned, we find that the aforesaid decision has already been reversed by Hon ble Gujarat High Court vide Leena Jugalkishor Shah Vs. ACIT [72 Taxmann.com 185 14/06/2016] and therefore, the same could not help revenue in any manner. As per Hon ble court, prior to the amendment the only stipulation was to invest in a new residential property and there was no scope for importing the req .....

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