TMI Blog2018 (6) TMI 1604X X X X Extracts X X X X X X X X Extracts X X X X ..... in a residential house situated in India within the stipulated period. When section 54F was clear and unambiguous, there was no scope for importing into the statute words which were not there. As in the instant case, as the assessee has invested capital gains in purchase of residential house prior to amendment to section 54F of the Act by the Finance (No. 2) Act, 2014, which came into force w.e.f. April 01, 2015, the exemption is allowable. - Decided in favour of assessee Assessee has not deposited the safe consideration amount in the capital gains bank account - due date for furnishing the return of income according to section 139(1) - HELD THAT:- In Humayun Suleman Merchant [ 2016 (9) TMI 70 - BOMBAY HIGH COURT] it has been held that where the amounts of capital gains is utilized before filing the return of income in purchase/construction of a residential house, then the benefit of exemption u/s 54F is available. Also in K. RAMACHANDRA RAO [ 2015 (4) TMI 620 - KARNATAKA HIGH COURT] held assessee having invested entire sale consideration in construction of a residential house within three years from the date of transfer, he could not be denied exemption u/s 54F on the gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowing deduction under section 54 for investment of capital gain in purchase of new residential house in Australia and thus allowing the shifting of tax base of India to a foreign country, whereas, provisions of Income-tax Act extends to India only and not extra territorial? 2. Whether on facts and circumstance of the case, the Ld. CIT(A) has erred in granting the exemption u/s 54F even when the assessee has not deposited the safe consideration amount in the capital gains bank account whereas the Hon ble Bombay High Court in the case of Humanyu Suleman Merchant ITA 545/M/2002 has held that the un-utilized amounts would be subject to the charge of capital gain tax, unless they are deposited in specified bank account as notified in terms of Section 54F(4) of the Act? 3. Whether on facts and circumstance of the case the Ld. CIT(A) has erred in holding the indexation year of cost of acquisition to be 1981-82 without appreciating that the house property at Chennai was inherited by the assesses on 10.06.2001 i.e. only after her mother's expiry? 3. We begin with the 1st ground of appeal. Briefly stated the facts are that the assessee had inherited house ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this. On appeal by the assessee, the Hon ble High Court held allowing the appeal that : The assessee had purchased a residential house in the United States of America out of the capital gains on sale of the plot in India and thus she had fulfilled the conditions stipulated in section 54F of the Act. The assessee invested the capital gains in a residential house within the stipulated time. There was no condition in section 54F of Act at the relevant time that the capital gains arising out of transfer of capital asset should be invested in a residential house situated in India. The language of section 54F of the Act before its amendment was that the assessee should invest capital gains in a residential house. It was only after the amendment to section 54F of the Act by the Finance (No. 2) Act, 2014, which came into force with effect from April 1, 2015 that the assesses should invest the sale proceeds arising out of sale of capital asset in a residential house situated in India within the stipulated period. When section 54F was clear and unambiguous, there was no scope for importing into the statute words which were not there. Moreover, when the language of a taxing provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (out of ₹ 35 lakhs paid till the filing of return) from capital gain tax in terms of section 54F. However, the balance consideration which was payable for purchase of the flat pursuant to the agreement dated 16.07.1996 was brought to tax under the head Capital Gains on account of assessee s failure to deposit the unutilized consideration for purchase of the flat in specified bank accounts in accordance with the scheme of the Central Government as provided u/s 54F(4). On appeal the CIT(A) recorded the fact that the appellant had obtained possession of the new flat on 27.01.1997. However, the order of the AO dated 13.03.2001 was not disturbed. On further appeal, the Tribunal dismissed the appeal of the assessee. On appeal filed by the assessee, the Hon ble High Court held that the Tribunal was right in holding that the AO had rightly computed the deduction u/s 54F, restricting the investment in new asset at ₹ 35 lakhs and thus, restricting the exemption u/s 54F proportionately to the amount invested. The Ld. counsel submits that the assessee had filed her original return of income on 20.06.2011 and disclosed a LTCG on sale of residential house property at Chenn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration in construction of a residential house within three years from the date of transfer, he could not be denied exemption u/s 54F on the ground that he did not deposit said amount in capital gains accounts scheme before due date prescribed u/s 139(1). In CIT v. Ms. Jagriti Aggarwal (2011) 339 ITR 610 (P H), the assessee sold her house property for 45 lakhs and claimed deduction u/s 54 of the Act. The AO declined the claim holding that the assessee failed to deposit the amount in the capital gains account scheme and also failed to purchase house property before the due date of filing the return of income. The Commissioner (Appeals) held that the assessee had purchased the new residential property on January 02, 2007 and the due date according to section 139(4) was March 31st, 2007 and thus, the assessee had complied with the provisions of section 54 of the Act. This order was confirmed by the Tribunal. On appeal by the revenue, the Hon ble High Court held, dismissing the appeal, that the sale of the asset had taken place on January 13, 2006, falling in the previous year 2006-07, the return could be filed before the end of the relevant assessment year 2007-08 i.e. March 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st indexation only from FY 2001-02. 5.1 In appeal the Ld. CIT(A) relying on the judgment of the Hon ble Bombay High Court in the case of CIT v. Manjula J. Shah (2013) 355 ITR 474 (Bom) held that the assessee was right in taking 01.04.1981 as the date of acquisition and also applying it as the date for working out the indexation cost. 5.2 Before us, the Ld. DR relies on the order of the AO whereas the Ld. counsel of the assessee relies on the decision in Manjula J. Shah (supra) and the order of the Ld. CIT(A). 5.3 We have heard the rival submissions and perused the relevant materials on record. We find that the above issue has been decided by the Hon ble Bombay High Court in Manjula J. Shah (supra). In that case the assessee s daughter, the previous owner, originally acquired the capital asset (flat) on January 29, 1993, and the assessee acquired the flat under a gift deed dated January 02, 2003, without incurring any cost. The assessee sold the capital asset on June 30, 2003, for ₹ 1.10 crores. According to the AO, the asset was held by the assessee from February 01, 2003, and, therefore, the cost inflation index for 2002-03 would be applicable in d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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