TMI Blog2019 (3) TMI 160X X X X Extracts X X X X X X X X Extracts X X X X ..... ential house was to be made in India during the year under consideration, hence the claim of exemption so raised by him under Sec. 54 in respect of the new residential house that was purchased by him at Dubai, UAE was well in order. No infirmity emerges from the order passed by the CIT(A), who had rightly directed the A.O to grant exemption to the assessee under Sec. 54 in respect of the investment made by him in the residential property in Dubai, UAE, thus uphold his order. - Decided against revenue - ITA No.6430/Mum/2017 - - - Dated:- 27-2-2019 - Shri G.S.Pannu, Vice President And Shri Ravish Sood, Judicial Member For the Appellant : Shri V. Sreekar, D.R For the Respondent : Shri Sanjay Parikh, A.R ORDER PER RAVISH SOOD, JM The present appeal filed by the assessee is directed against the order passed by the CIT(A)-56, Mumbai, dated 23.08.2017, which in turn arises from the order passed by the A.O under Sec. 143(3) of the Income Tax Act, 1961 (for short IT Act ), dated 26.12.2016. The assessee assailing the order of the CIT(A) has raised before us the following grounds of appeal : 1. Whether on facts and in law, the Ld.CIT(A) is correct in holdin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er deliberating on the contentions advanced by the assessee that the exemption envisaged under Sec. 54 during the period relevant to the year under consideration was also available in respect of an investment made by an assessee towards purchase or construction of a new residential property situated abroad was persuaded to subscribe to the same. It was observed by the CIT(A) that the issue before him was to be viewed in context of the situation prior to the amendment that was made available on the statute vide the Finance Act, 2014. Apart there from, it was noticed by him that the issue under consideration was covered by the judgment of the Hon ble High Court of Gujarat in the case of Leena Jugalkishor Shah Vs. ACIT (2017) 392 ITR 18 (Guj) and an order of the ITAT, Mumbai in the case of ITO Vs. Mr. Nishant Lalit Jadhav (ITA No. 6883/Mum/2014; dated 26.04.2017). The CIT(A) observed that as per the pre-amended Sec. 54 (i.e prior to the amendment made available on the statute vide the Finance Act, 2014 w.e.f 01.04.2015) there was no explicit requirement that the investment in the new residential house was to be made only in India. On the basis of his aforesaid observations the CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the income of which is chargeable under the head Income from house property (hereafter in this section referred to as the original asset), and the assessee has within a period of [one year before or two years after the date on which the transfer took place purchased], or has within a period of three years after that [ constructed, a residential house ] then], instead of the capital gain being charged to income tax as income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section, that is to say,- (i) if the amount of the capital gain [is greater than the cost of [the residential house] so purchased or constructed (hereaf ter in this section referred to as the new asset)], the difference between the amount of the capital gain and the cost of the new asset shall be charged under section 45 as the income of the previous year; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase or construction, as the case may be, the cost shall be nil; or (ii) if the amount of the capital gain is equal to or les ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only in India. Rather, we find that the legislature in all its wisdom had only pursuant to the amendment to Sec. 54 by the Finance (No.2) Act, 2014 had w.e.f 01.04.2015 restricted the entitlement of an assessee towards exemption therein envisaged by providing a rider that the new residential house purchased or constructed shall be situated in India. In sum and substance, the legislature had w.e.f A.Y 2015-16 squeezed the scope and gamut of the exemption contemplated in Sec. 54 and had restricted the same only in respect of an investment made by the assessee towards purchase or construction of a residential house situated in India. The aforesaid legislative intent can safely be gathered from a perusal of the Notes on clauses explaining the purpose behind the aforesaid amendment to Sec. 54, vide the Finance (No.2) Act, 2014 w.e.f 01.04.2015, which reads as under: Clause 22 of the Bill seeks to amend section 54 of the Income-tax Act relating to profit on sale of property used for residence. The existing provisions contained in sub-section (1) of Sec. 54 provide that where capital gain arises from the transfer of a long term capital asset, being a residential house, and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use. When the section 54F of the Income-tax Act was clear and unambiguous, there is no scope f or impor t ing into the statute the words which are not there. Such importation would be not to construe but to amend the statute. If there is any defect in the Act, it can be remedied only by the legislation and not by judicial interpretation. 10. In the present case the assessee has purchased the residential house in U.S.A. out of the sale proceeds of the plot in India and thus she has fulf illed the conditions of section 54F of the Income-tax Act before its amendment by the Finance (No. 2) Act. Moreover, when the language of a taxing provision is ambiguous or capable of more meanings than one, then the court has to adopt the interpretation which favours the assessee. Section 54F of the Act before its amendment was clear that the assessee should investment in a residential house. The language of section is clear and unambiguous. Therefore, we cannot import into the statute the words 'in India' as interpreted by the authorities. Thus, taking into consideration the above facts, we are of the opinion that benef it of section 54F before its amendment can be extended to a reside ..... X X X X Extracts X X X X X X X X Extracts X X X X
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