TMI Blog2018 (5) TMI 1877X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant time that the capital gain arising out of transfer of capital asset should be invested in a residential house situated in India. In the present case the assessee has purchased the residential house abroad out of the sale proceeds of the plot in India and thus she has fulfilled the conditions of section 54F of the Income-tax Act application to the assessee's case. - Decided in favour of assessee. - ITA No. 4159/Del/2016 - - - Dated:- 23-5-2018 - Shri Bhavnesh Saini, Judicial Member And Shri L.P. Sahu, Accountant Member Assessee by : Shri S.K. Tulsiyan, Advocate, Ms. Nisha Rachh, C.A. and Sh. Karan Kumra, C.A. Revenue by : Sh. Ravi Kant Gupta, Sr. DR ORDER Per L. P. Sahu, A. M. This is an appeal filed by the assessee against the order of ld. CIT(A)-43 dated 11.05.2016 for the assessment year 2013-13 on the following grounds : 1. That on the facts and circumstances of the case of the appellant and in law, the Ld. Commissioner of Income Tax -43 [hereinafter referred to as the CIT(A) )] has erred in confirming the denial by the Ld. Deputy Commissioner of Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e value of the same was adopted of ₹ 13.14 crores, as sale consideration in view of section 50C of the Act. The cost of acquisition claimed by the assessee after indexation was shown at ₹ 87,80,287/- and claimed transfer expenses of ₹ 11,99,443/-, thereby a long term capital gain arrived at ₹ 12,14,20,270/-. The assessee invested the capital gain of ₹ 8,70,97,925/- in purchase of his residential property in Boston, USA and declared the balance amount of ₹ 3,43,22,345/- as long-term capital gains in his return of income filed. According to the Assessing Officer, the assessee s claim for exemption u/s. 54 on investment in house property purchased abroad is out of the purview of section 54 54F of the Act. He, therefore, being dissatisfied with the submissions of the assessee and relying on the case law in American Hotel Lodging Association Educational Institute (supra), rejected the claim of exemption made by the assessee. In appeal, the ld. CIT(A) after considering the submissions of the assessee and the case laws, also denied the exemption u/s. 54 of the Act. Aggrieved, the assessee is in appeal before the Tribunal. 3. The ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the act is admissible to construe those words. It is only where a statute is not exhaustive or where its language is ambiguous, uncertain, clouded or susceptible of more than one meaning or shades of meaning, that external evidence as to the evils, if any, which the statute was intended to remedy, or of the circumstances which led to the passing of the statute may be looked into for the purpose of ascertaining the object which the legislature had in view in using the words in question 1.3. Further, it is also a settled position that the court cannot read anything into a statutory provision which is plain and unambiguous. Support in this regard is taken from the decision of the Hon'ble Karnataka High Court in the case of DIT(International Taxation) v. Mrs. Jennifer Bhide [2012] 349 ITR 80/[2011] 203 Taxman 208/15 taxmann.com 82 (Kar.) in /. 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 sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, it cannot be applied retrospectively prior to the amendment assessment year. 3.1. In support of the above contention reliance is placed on the decision of the Supreme Court in the case of Commissioner of Income Tax -III, Pune Vs Rajasthan And Gujarati Charitable Foundation Poona, Civil Appeal No. 7186 of 2014 (order copy enclosed) In this case, the issue concerned regarding disallowance of claim of depreciation u/s.32 of the Act by the AO on the ground that once the capital expenditure is treated as application of income for charitable purposes, the assessee had virtually enjoyed a 100 per cent write off of the cost of assets and, therefore, the grant of depreciation would amount to giving double benefit to the assessee. In this regard, finally, the Hon'ble Supreme Court, denying the contention of the Department, held as under: It may be mentioned at this stage that the legislature, realizing that there is no specific provision in this behalf in the Income Tax Act, has made amendment in Section 11(6) of the Act No.2/2014 which became effective from the Assessment Year 2015-16. The Delhi High Court has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A) noticed that the requirement of making the investment in a property in India was inserted by the Finance (No.2) Act, 2014 w.e.f. 01/04/2015 and, therefore, in the instant assessment year the claim of exemption under section 54 of the Act could not be denied on this ground. In coming to such conclusion, the CIT(A) also relied upon the decision of the Mumbai Tribunal in the case of Mrs. Prema P. Shah Sanjiv P. Shah vs. ITO, 100 ITD 60 (Mum) , ITO vs. Girish M. Shah in ITA No.3582/Mum/2009 and Vinay Mishra vs. CIT , in ITA No.895/(bang) of 2012. Against such a decision of the CIT(A), Revenue was in appeal before the Hon'ble ITAT. 3.2.2. It was duly held by the Hon'ble ITAT as under: (para 5 of the Order) Undoubtedly, prior to the amendment made by Finance (Nos.2) Act, 2014 w.e.f. 01/04/2015, the language of section 54 of the Act required the assessee to invest the capital gain in a residential property. It is only subsequent to the amendment, which has come into effect from 01/04/2015* that such investment is required to be made in a residential property in India* The assessment year before us is prior to 01/04/2015, and, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Section 54 and 54F by the Finance Act, 2014 is prospective and cannot be applied retrospectively. Further the decision as relied upon by the assessee are also binding and applicable so far as pre-amended provisions are concerned however, these decisions are applicable only on the specific facts and not as a general rule. Applying the above to the case of the assessee, it is submitted that since the assessment year under consideration in the instant case is 2013-2014, which is prior to the amendment so brought in Finance (No.2) Bill, 2014, there arises no reason to decline the exemption claimed u/s.54 of the Act during the relevant assessment year. 3 4 Reference is further invited to the decision of the Mumbai ITAT in the case of ITO vs. Shri Farokh Jal Deboo, ITA No. 4650/Mum/2013, (order copy enclosed). In the said case, the Hon'ble Tribunal held as under: 7. The Finance (No 2) Bill, 2014 brought an amendment in Section 54, wherein sub-section (I), for the words constructed, a residential house , the words constructed, one residential house in India has to be substituted w.e.f. 1st day of April, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income-tax Act, in the instant case of the Assessee, the issue which arises for consideration is related with the eligibility for exemption under section 54F of the Act. Also, in the light of the numerous decisions which are directly on the specific issue of retrospective amendment to section 54F of the Act, the indirect inference sought to be drawn from the said decision has no weightage. 6. Lastly, before concluding the said submission, it would be of relevance to bring to your Honours notice that it in respect of the cardinal principal of interpretation of a statute in respect of a benefit to be given, the Courts have unanimously held that while granting a benefit liberal construction should be adopted. A provision for exemption or relief should be construed liberally and in favour of the assessee even if it results in his obtaining a double advantage . Refer CIT vs. Naga Hills Tea Co. Ltd. [89 ITR 236, 240 (SC)] and CIT vs. Contr ED vs. Kanakasabai [89 ITR 257, 257(5C)J. Reliance in this connection is also placed on the decision of the Apex Court in the case of Gursahai Saigal vs. CIT [48 ITR (SC) 1] wherein it was held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia. The assessment year before us is prior to 01.04.2015. Therefore, the amendment would not be application. Similar situation, though in the context of section 54F of the Act, has been considered by the Hon ble Gujrat High Court in the case of Leena Jugal Kishore Shah, 392 ITR 18 (Guj) wherein, the identical issue has been decided in favour of the assessee, holding as under : Assessing Officer observed that the sale proceeds of the plot of land has not been utilized in acquiring the residential house in USA. Moreover, the residential house purchased/constructed in USA is not subject to tax in India within the meaning of section 54 of the Income-tax Act. The Assessing Officer, therefore, did not allow the claim of deduction and brought the amount to tax. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter in appeal before the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals) observed that acquiring of new asset outside India by the assessee is beyond the purview of the Income-tax Act and as such section 54F will have no There is no finding recorded by the authorities below that the appellant-assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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