TaxTMI 
TaxTMI 
2020 (12) TMI 982
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....rred in not following the ratio laid down by the Hon'ble High Court of Karnataka in its judgment in the case of Shri. K. Ramachandra Rao (ITA No. 47/2014, 46/2014, 494/2013 and 495/2013) to hold that where the intention was not to retain cash but to invest in construction of a new residential house, the appellant cannot be denied the benefit of exemption u/s. 54 for not depositing the unutilized capital gain in the capital gains account, so long as the construction of the residential house is complete within the time permissible u/s. 54(1) of the Act. 4. Without prejudice, and having regard to the meaning of the expression "a residential house" appearing in Sec.54(1) as clarified by various courts including the jurisdictional High Court of Karnataka, the Learned Commissioner of Income-tax (Appeals) was in error in holding that the appellant was not entitled to the benefit of the exemption u/s. 54 in respect of the new residential house constructed in Bangalore as well as the residential house purchased in Chicago, USA within the time stipulated under the provisions of Sec.54(1). 2. In this case, the assessee has claimed exemption u/s 54 of the Income-tax Act,1961 ['the A....
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..... K. Rama Chandra Rao (supra). In the present case, assessee earned long term capital gain at Rs. 10,18,96,500/- . The assessee has invested in construction of new residential house at Rs. 7,59,92,601/- within the due date u/s 139(1) of the Act i.e. 31.7.2014. The assessee is having balance capital gains of Rs. 2,59,03,899/-, which ought to have been used for construction of residential house or should have been deposited in the capital gain account notified by the Central Government in terms of section 54(2) of the Act. Thus, it is very clear that the assessee has not invested an amount of Rs. 2,59,03,899/- which should have been invested in capital gain account scheme. In other words, as per section 54(2) of the Act, if the capital gain is not appropriated towards purchase of the new asset before one year from the date of transfer of the original asset or is not utilized for the purchase or construction of a new asset before the date of furnishing the date of return of income u/s 139 of the Act, such unutilized capital gain has to be deposited in a capital account scheme, before the due date of furnishing the return of income provided u/s 139(1) of the Act. Thus, section 54(2) o....
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.... on the property purchased outside India and that the amendment made to section 54F of the Act by the Finance Act, 2014 w.e.f. 2015 is applicable only prospectively from AY 2015-16 and not to earlier assessment year. By the said amendment, the provisions of section 54F(1) were amended whereby it was laid down that the new asset purchased or constructed by utilising the capital gain must be in India. He also relied on the decision of the ITAT Mumbai Bench in the case of ACIT v. Jai Kumar Gupta HUF, ITA No.5303/Mum/2017 AY 2013-14, order dated 28.2.2019 and decision of ITAT Bangalore in the case of Mrs. Suma v. ITO, ITA No.568/Bang/2018 for AY 2006-07, order dated 20.7.2018. It was held that deduction u/s. 54F can be considered and allowed even though the assessee has made claim for deduction only u/s. 54 of the Act provided the conditions laid down in section 54F are satisfied. 8. The Id. DR submitted that the issue should be directed to be examined by the AO afresh in the light of decision cited by the id. counsel for the assessee. 9. We have given a careful consideration to the rival submissions. We find that in the decision rendered in the case of Jai Kumar Gupta HUF (supra) ....
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....hat there is no scope for importing into the statute words which are not there. Such importation would be, not to construe, but to amend the statute. Even if there be a casus omissus, the defect can be remedied only by Legislation and not by judicial interpretation. 12. Further, in the case of Sodra Devi (supra), it was held by the Hon'ble Apex court that unless there is an ambiguity, it would not be open to the Court to depart from the normal rule of construction which is that the intention of the legislature should be primarily to gather from the words which are used. It is only when the words used are ambiguous that they would stand to be examined and considered on surrounding circumstances and constitutionally proposed practices. 13. We have also examined the order of the Tribunal in the case of Vinay Mishra (supra), in which it has been held that 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 of the Act. The Tribunal accordingly held that assessee 's claim for exemption under section 54F of the Act shall be allowed since all conditions laid down....