AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2014 (7) TMI 1279
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....t in respect of long term capital gain arising therefrom amounting to Rs. 55,10,506/- by investing an amount of Rs. 1,05,41,675/- in residential house situated at 66B, Peveral Street, Ricarton, Christchurch, New Zealand. Assessment was completed under section 143(3) of the Act by the Assessing Officer having disallowed the exemption claimed under section 54F of the Act only on the ground that the investment in respect of residential property has been made by the assessee outside India. 3. The assessee preferred an appeal before the ld. CIT(A) with the submission that the entire income be it from capital gains or income from house property of resident Indian is taxable in India subject to tax credit under section 90 of the Act, if any, as per provisions of section 5 of the Act. Therefore, exemption claimed in respect of investment made outside India should also be allowable. It was further contended before the ld. CIT(A) that once sale of property out of India is taxable, the investment of sale proceeds of the same outside India are to exempt unless specifically prohibited and the assessee cannot be put to a discomfort that any sale of property out of India shall be eligible for an....
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....ermore in another para it has been held that "The wider meaning given to the word "used" in the judgment under challenge is untenable. Having regard to the fact that the said Act is a taxing statute, no Court is justified in imputing to the legislature an intention that it has not clearly expressed in the language it has employed." In another case Anandji Haridas & Co. P. Ltd. V. Engineering Mazdoor Sangh And Another.(099)-ITR -0592 -SC "As a general principle of interpretation, where the words of a statute are plain, precise and unambiguous, the intention of the legislature is to be gathered from the language of the statute itself and no external evidence such as parliamentary debates, reports of the committees of the legislature or even the statement made by the minister on the introduction of a measure or by the framers 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 s....
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.... that nothing can be added or substituted in any section unless expressly provided or unless some ambiguity is arising out of the plain reading. Section 54F is clear and there is no ambiguity as regards the section. The plain reading of the section states that the benefit of deduction shall be allowed to a person if he fulfils certain conditions. The section is without any reservation as to the place of investment and thus this cannot be substituted by the Ld AO. Now coming to a specific case also the Hon'ble Apex Court had an occasion to adjudicate the same issue in respect of a different section that whether the words "In India" can be added into or read into a section when they are not specifically laid down in the statute. The Apex Court in the case of American Hotel & lodging Association Educational Institute vs. CBDT (2008) 170 Taxman 306 has held as under "The next question which arises for consideration is whether the words "in India" should be read into Section 10(23C)(vi) and/or in the third proviso thereto ? Section 10(23C)(vi) seeks to exempt income of institutions with laudable objects and activities such as universities, hospitals etc. As stated above, stipu....
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....ds of the third proviso do not require application of income to be in India. Our judgment should not be understood to mean that the applicant has not to impart educational activities in India. If the applicant wants exemption under Section 10(23C)(vi) it has to impart education in India and only then it would be entitled to claim initial approval under that section. That is the reason for our saying that the "non-profit" qualification has to be tested against Indian activities. Our conclusion is that importation of education must be in India if applicant desires exemption under Section 10(23C)(vi) and that excess/deficit of income over expenditure will not decide whether the applicant exists for profit or not. " Thus though the discussion of the provision as regards the section is different i.e. the judgement refers to provisions of section 10(23C) but the moot question in the case of the appellant i.e. investment for the purposes of section 54F and the case of American Hotel & lodging Association Educational Institute (supra) was exactly the same i.e. whether the words "In India" could be read into a provision unless specifically laid thereon and Apex Court has specifically give....
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....other educational institution" and not the words "a university". But this strict interpretation is of no great account for the purposes of this case, and the expression may be read to qualify both "a university" and "other educational institution". For the purposes of obtaining the exemption under cl. (22) the university must be "existing solely for educational purposes and not for the purposes of profit". What this means is that the sole purpose of a university must be to impart education and not at all to make profit. The word "existing" in the context means "being". It has no locational sense. The clause does not say "existing in India" and the words "in India" cannot be read into it. The clause does not require that the university must impart education in India before it can qualify for exemption thereunder. The High Court was in error in interpreting the clause differently At another page in the same judgement it has been mentioned that "Point No. 2 The conclusion urged on behalf of the Revenue is that cl. (22) of s. 10 of the Act applies only to Indian universities. Sec, 10(22) per se does not stipulate that a university or other educational institution should be Indian. ....
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.... distribute its income in any manner to its members': Provided further that any notification issued by the Central Government under this clause shall, at any one time, have effect for such assessment year or years, not exceeding three assessment years (including an assessment year or years commencing before the date on which such notification is issued) as may be specified in the notification; v 10(23) any income of an association or institution established in India which may be notified by the Central Government in the Official Gazette having regard to the facts that the association or institution has as its object the control, supervision, regulation or encouragement in India of the games of cricket, hockey, football, tennis or such other games or sports as the Central Government may, by notification in the Official Gazette, specify in this behalf......." From the above provisions, it is evident that wherever the constitution, setting up or establishment 'in India', as the case may be, was intended by the legislature, it said so. The legislature did not say that in relation to cl. (22) of s. 10 of the Act. It is thus evident that the establishment, constitution ....
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....ai 89 ITR 251, 257(5C) it has been held that 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". In Gursahai Saigal vs. CIT 48 ITR (SC) 1 it has been held that Those sections which impose the charge or levy should be strictly construed; but those which deal merely with the machinery of assessment and collection should not be subjected to a rigorous construction but should be construed in a way that makes the machinery workable. In Bajaj Tempo Ltd. 196 ITR 188 (SC) the Honble Apex court has held that a provision in a taxing statute granting incentives for promoting growth and development should be construed liberally, and since as provision for promoting economic growth has to be interpreted liberally, the restriction on it too has to be construed so as to advance the objective of the provision and not to frustrate it. While interpreting the various provisions, the Court must not adopt a hyper technical approach and apply cut and dry formula. A pragmatic approach should be adopted so that the object of the introduction/insertion of a particular provision could be achieved. Thu....
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....axman 306. a similar issue had arisen before the Hon'ble Supreme Court that whether the words "In India" can be read into section 10(23C) when, they are not specifically mentioned in that section and the Hon'ble Apex Court categorically gave instances that where the legislature so desired the words have been specifically used. I am in agreement with the submissions of the appellant and also various case laws given by him on the issue under consideration and also the case of Mrs. Prema P. Shah (2) Sanjiv P. Shah V. Income-Tax Officer 282-ITR -0211 of Mumbai ITAT which on a similar issue has held in favour of the appellant. As such I hold that the appellant is entitled to benefit of deduction u/s 54F in respect of purchase of residential house out of India as all other conditions provided in that section have been fully complied with by the appellant." 5. Aggrieved, the Revenue is in appeal before the Tribunal against the order of the ld. CIT(A). 6. The ld. D.R. has emphatically argued that section 54F of the Act is a beneficial section and it was introduced to encourage the citizens of India to make investment in residential houses. There had been no intention of the Legis....
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....n 54F of the Act. 9. Having heard the rival submissions and from a careful perusal of the orders of the authorities below, we find that it has been repeatedly held by the Hon'ble Apex Court and various High Courts that cardinal rule of interpretation is that the statute must be construed according to its plain language and neither should anything be added nor subtracted therefrom unless there are adequate grounds to justify the inference that the legislature clearly so intended. It is also well settled that in a taxing statute one has to look merely at what is clearly stated The meaning and extent of the statute must be collected from the plain and unambiguous expression used therein, rather than from any notions which may be entertained by the Court as to what is just or expedient. 10. In the case of CIT vs. T.V. Sundaram Iyyengar (supra), their Lordships have held that if the language of the statute is clear and unambiguous, the court cannot discard the plain meaning, even if it leads to an injustice. 11. Again in the case of Smt. Tarulata Shyam vs. CIT (supra), it was held that there is no scope for importing into the statute words which are not there. Such importation wo....