Appeal granted for Section 54F deduction on Dubai investment. Revised income computation remitted for review.

The tribunal allowed the appeal of the assessee, granting the deduction under Section 54F for the investment made in Dubai, UAE. The issue of the revised computation of income for the sale of shares was remitted back to the AO for consideration on merits. Other issues regarding the adoption of sale price and rejection of valuation reports were deemed academic and not further adjudicated. The decision was pronounced on 15.02.2018.

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Issues Involved:
1. Disallowance of exemption claim under Section 54F of Rs. 76,66,657.
2. Adoption of the sale price of Terrace in Arcadia Building as per Stamp Duty Valuation Authority under Section 50C of Rs. 86,32,000.
3. Rejection of the valuation report valuing the terrace sold at Rs. 9,90,000 as on 01-04-1981.
4. Disregard of the revised computation of income filed by the assessee, claiming sale of shares of a private limited company under Long Term Capital Gains instead of Short Term Capital Gains.

Detailed Analysis:

1. Disallowance of Exemption Claim under Section 54F:
The primary issue was whether the assessee was entitled to a deduction under Section 54F for an investment made in a residential flat in Dubai, UAE. The AO and CIT(A) denied this claim, asserting that the residential house property must be situated in India. The AO relied on the ITAT Mumbai decision in Farhad J Bottlewalla v. ACIT, which supported this view. However, the assessee cited the Gujarat High Court decision in Leena Jugal Kishore Shah vs. ACIT, which held that investments in residential house properties outside India were entitled to deduction under Section 54F before the amendment by Finance Act 2014 (effective from 01.04.2015). The tribunal, considering this precedent and the similar ITAT Mumbai decision in ITO v. Nishant Lalit Jadhav, ruled in favor of the assessee, allowing the deduction under Section 54F for the investment made in Dubai, UAE.

2. Adoption of Sale Price as per Stamp Duty Valuation Authority under Section 50C:
The tribunal did not explicitly address this issue in detail, as the resolution of the primary issue (deduction under Section 54F) rendered other related issues academic. The tribunal refrained from adjudicating this matter further.

3. Rejection of Valuation Report of Rs. 9,90,000 as on 01-04-1981:
Similar to the second issue, the tribunal did not delve into this matter in detail. The resolution of the primary issue concerning the deduction under Section 54F made this issue academic, and thus, it was not further adjudicated.

4. Disregard of Revised Computation of Income:
The assessee claimed that the sale of shares of a private limited company should be treated as Long Term Capital Gains instead of Short Term Capital Gains as originally declared. This claim was made through a revised computation of income filed during assessment and appellate proceedings but was not accepted by the AO and CIT(A) as it was not filed through a revised return of income. The tribunal referred to the Supreme Court decision in Goetze (India) Ltd. and the Bombay High Court decision in CIT v. M/s. Pruthvi Brokers & Shareholders, which allowed additional claims to be made before appellate authorities even if not filed through a revised return. Consequently, the tribunal admitted the assessee's claim and remitted the matter back to the AO for consideration on merits, directing the AO to evaluate the claim based on the contentions and evidence provided by the assessee.

Conclusion:
The tribunal allowed the appeal of the assessee, granting the deduction under Section 54F for the investment made in Dubai, UAE, and remitted the issue of the revised computation of income for the sale of shares back to the AO for consideration on merits. The other issues were deemed academic and not adjudicated further. The decision was pronounced in the open court on 15.02.2018.

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