TaxTMI 
TaxTMI 
2016 (2) TMI 570
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....ssee claimed indexation cost of acquisition w.e.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....
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.... of the Income-tax Act, 1961. 1:2 The Appellant submits that considering the facts and circumstances of his case and the law prevailing on the 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 resident....
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.... and was invested in a flat in Dubai. As per AO assessee was not entitled for claim of exemption u/s.54 in respect of investment made in house property outside India. 5. It was contended by ld. DR that CIT(A) has already considered 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,....
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....ption u/s.54 in both the appeals of the ITA No.7058/M/2013 Ms. Dhun Jehan Contractor 5 assessees. The AO is also at a liberty to verify actual acquisition of house property outside India, in terms of transfer deeds so executed in favour of assessee. We direct 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 th....
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....sdictional High Court in the case of Manjula J. Shah (355 ITR 474) (Bom) on this issue. 9.3 The facts of the matter as emanate from the record, on the issue of the assessee's claim for indexation of the cost of acquisition of the property at 21- 22, A, Mehezin, Woodhouse Road, Colaba, Mumbai-400005 are as follows. This property was acquired by the assessee, 50% on the expiry of his father on 11.11.1963 and the remaining 50% on the expiry of his mother on 18.10.2006. In respect of the assessee's claim that the indexed cost of acquisition, on inheritance of 50% of the said property on expiry of his father on 11.11.1963 is to be computed from 01.04.1981, there is no dispute. The dispute before us is in respect of the date to be adopted for computing the indexed cost of acquisition of the remaining 50% of the said property inherited by the assessee on the expiry of his mother on 18.10.2006; whether it should be 01.04.1981 as contended by the assessee or from financial year 2006-07 as held by the AO. We find that in the decision of the jurisdictional High Court in the case of Manjula J. Shah (355 ITR 474), followed by the learned CIT(A) in the impugned order and relied upon b....