TMI Blog2022 (8) TMI 485X X X X Extracts X X X X X X X X Extracts X X X X ..... house in India. Thus, this amendment provides that prior to 01.04.2015 the investment made by assessee in residential property outside India were eligible for exemption under section 54/54F. Substituted for constructed, a residential house by Finance (No. 2) Act, 2014 w.e.f. 01.04.2015 Since, the amendment is not said to be retrospective in nature, as the amendment was brought by Finance Act, 2014 and made applicable in relation to Assessment Year 2015-16 and subsequent Assessment Years and since all the conditions laid down u/s 54F are satisfied by the assessee to avail the exemption, we hereby allow the claim of the assessee for exemption u/s 54F. Appeal of assessee allowed. - ITA No. 2002/Del/2019 - - - Dated:- 13-7-2022 - Sh. Sak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he order of the Assessing Officer on the grounds that the marginal note to Section 54F inserted by the Finance Act, 1982 w.e.f. 01.04.2003 which has been further explained in the Circular No. 346 dated 30.06.1982 doesn t allow the assessee, the exemption u/s 54F. 4. The ld. CIT relied on the Explanatory Notes on the provisions of Finance Act, 1982 in para 20.2 which reads as under: with a view to encouraging house construction, the Finance Act, 1982, has inserted a new Section 54F held that the assessee was not eligible for exemption u/s 54F as the reinvestment of the capital gain was made in a residential house outside India, i.e. in Malaysia. 5. Quoting the provisions of sub-section (3) of Section 54F, the ld. CIT also held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble for claiming u/s 54F provided all the conditions laid down for exemption are met by the assessee. 9. Similarly, the Hon ble High Court of Gujarat in the case of Leena J. Shah Vs ACIT in ITA No. 483 of 2006 vide order dated 14.06.2016 held that once the assessee fulfilled conditions stipulated in Section 54F of the Act as there is no condition in Section 54F of the Act that capital gain arising out of transfer of capital asset should be invested in residential house situated in India, therefore, benefit of Section 54F of Act before its amendment could be extended to residential house purchased outside India too. 10. Owing to the judgments, an amendment has been brought in Section 54F vide Finance Act, 2014. 11. We have gone thro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e original asset, the whole of such capital gain shall not be charged under section 45 ; (b) if the cost of the new asset is less than the net consideration in respect of the original asset, so much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of the new asset bears to the net consideration, shall not be charged under section 45: Provided that nothing contained in this sub-section shall apply where- (a) the assessee,- (i) owns more than one residential house, other than the new asset, on the date of transfer of the original asset; or (ii) purchases any residential house, other than the new asset, within a period of one year after the date of transfer of the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to tax under section 45 of the Income-tax Act. 20.2 The provisions contained in sub-section (1) of section 54F of the Income-tax Act, before its amendment by the Act, interalia, provided that where capital gains arises from transfer of a long-term capital asset, not being a residential house, and the assessee within a period of one year before or two years after the date of transfer, purchases, or within a period of three years after the date of transfer constructs, a residential house, then, the portion of capital gains in the ratio of cost of new asset to the net consideration received on transfer is not chargeable to tax. 20.3 Certain courts had interpreted that the exemption is also available if investment is made in more th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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