TaxTMI 
TaxTMI 
2016 (2) TMI 570
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.....f. 01.04.1981 and consequently computed the Long Term Capital Gains on sale thereof at Rs. 1,85,50,110/-. The assessee also claimed exemption under section 54 of the Income Tax Act, 1961 (in short 'the Act') in respect of investment of Rs. 1,22,53,878/- in the acquisition of new residential property situated at 151, Whispering Lane, Winona, Winona County, Minnesota 55987, USA and offered the remaining LTCG of Rs. 62,96,232/- to tax. The Assessing Officer (AO) did not agree with the assessee's computation of LTCG. In respect of the assessee's claim for computing the indexed cost of acquisition w.e.f. 01.04.1981, the AO was of the view that since the assessee inherited 50% share on his father's expiry on 11.11.1963, and 50% share on his mother's expiry on 18.10.2006, the indexed cost of acquisition was to be computed in two stages, i.e. financial year 1981-82 for 50% and financial year 2006-07 for 50% of the share of property. The AO also rejected the assessee's claim for being granted exemption under section 54 of the Act on the ground that the investment was in a property situated outside India. In that view of the matter, the AO proceeded to recompute the ....
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....e subject the deduction available u/s. 54 of the Income-tax Act, 1961 ought to have been granted to him and the stand taken by the Assessing Officer in this regard is erroneous, incorrect, illegal and unwarranted to say the least and the Commissioner of Income-tax(Appeals) ought to have held as such. 1:3 The Appellant submits that the Assessing Officer be directed to grant the deduction available u/s. 54 of the Income-tax Act, 1961 to the Appellant and to re-compute his total income and tax thereon accordingly. 2:0 Re.: General: 2:1 The Appellant craves leave to add, alter, amend, substitute and/or otherwise modify in any manner whatsoever all or any of the foregoing grounds of appeal at or before the hearing of the appeal." 4.1 The sole issue before us in the grounds raised in assessee's appeal (supra) is its contention that the learned CIT(A) had erred in not granting the assessee exemption of Rs. 1,22,53,878/- claimed under section 54 of the Act on the ground that the investment in the new residential house property was not situated in India. The learned A.R. for the assessee submitted that the issue in question, of exemption under section 54/54F of the Act, is covere....
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....onsidered the decision in the case of Dr. Girish M. Shah, Mrs.Prema P. Shah, Leena P. Shah, wherein it was ITA No.7058/M/2013 Ms. Dhun Jehan Contractor 4 held that exemption is permissible, even if investment in new residential house is made outside India. 6. On the other hand, ld. AR relied on the decision of Bangalore bench of the Tribunal in the case of Vinay Mishra, 141 ITD 301, wherein it was held that provisions of Section 54F does not suggest that new residential house acquired should be situated only in India. Accordingly exemption was granted in respect of residential house acquired outside India. It was observed that on a plain reading of provisions of Section 54F one does not find anything therein to suggest that the new residential house acquired should be situated in India. The words "in India" cannot be read into section 54F, when Parliament in its legislative wisdom has deliberately not used the words 'in India' in Section 54F, there was no reason to show that exemption will not be applicable in respect of house acquired outside India. Similarly, the Chennai Bench of the Tribunal in case of N.Ranganathan, 33 ITR(AT) 444 held that the profit on sale of property ....
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.... accordingly." 7. Accordingly, following the order of the co-ordinate bench of the Tribunal in the case of "Mr. Girdhar Mohanani & Mrs. Varsha Girdhar" (supra), we decide this issue in favour of the assessee and against the Revenue. AO is also at a liberty to verify fulfillment of other conditions of section 54 of Act." 4.3.2 Following the decision of the Coordinate Bench of this Tribunal in the case of Ms. Dhun Jehan Contractor in ITA No. 7058/Mum/2013 (supra), we hold that the assessee is entitled to be allowed exemption under section 54 of the Act in respect of the investment made in the purchase of the new residential property abroad in 151, Whispering Lane, Winona, Winona County, Minnwsota 55987, USA. The AO is accordingly directed. Consequently ground No. 1 (1.1 to 1.3) of the assessee's appeal is allowed. 5. Ground No. 2 of assessee's appeal being general in nature, no adjudication is called for thereon. 6. In the result, assessee's appeal for A.Y. 2009-10 is allowed. Revenues appeal for A.Y. 2009-10 in ITA No. 4650/Mum/2013 7. In this appeal, Revenue has raised the following grounds:- "1. On the facts and in the circumstances of the case and in law, whet....