2018 (9) TMI 873

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....ome Tax (Appeals) [CIT(A)] erred in confirming the order of the Assessing Officer [AO] in disallowing the claim of exemption u/s 54 of the Income Tax Act, 1961, being capital gains arising from the sale of a residential house in India, and the same invested in another house property in Hong Kong. 2. The CIT(A) erred in not following the decisions of jurisdictional tribunal which are favour of the Appellant, but chose to follow the decision in case of the order of the Ahmedabad Tribunal and Jurisdictional Tribunal where the issue involved is was with respect to section 54F and not section 54. The assessment for impugned AY was framed by Ld. Income Tax Officer (International Taxation)-3(1)(1), Mumbai [AO] u/s 143(3) of the Income Tax Act....

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....his Tribunal, Ld. AR drew our attention to the fact that the aforesaid decision of Ahmedabad Tribunal has subsequently been reversed by Hon'ble Gujarat High Court which demolishes the whole basis of disallowance as taken by the revenue. Per contra, Ld. Departmental Representative [DR], Ms. Pooja Swaroop submitted that if such deductions are allowed, the whole purpose of introducing incentive provisions would get defeated. 5. At the outset, we deem it fit to reproduce relevant statutory provisions as contained in Section 54, as they stood at the relevant time:- Profit on sale of property used for residence. 54.(1)Subject to the provisions of sub-section (2), where, in the case of an assessee being an individual or a Hindu undivided fam....

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....payer making investments outside India in residential house property to get the benefit of deduction u/s. 54 provided other conditions are fulfilled. 6. So far as the decision of Ahmedabad Tribunal rendered in Leena J.Shah as relied upon by the lower authorities is concerned, we find that the aforesaid decision has already been reversed by Hon'ble Gujarat High Court vide Leena Jugalkishor Shah Vs. ACIT [72 Taxmann.com 185 14/06/2016] and therefore, the same could not help revenue in any manner. As per Hon'ble court, prior to the amendment the only stipulation was to invest in a new residential property and there was no scope for importing the requirement of making such investment in a residential property located in India. We find that the....