2021 (4) TMI 129

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....non-resident Indian and derives income from the capital gains and filed return of income showing the income as nil. The case of the assessee was selected for scrutiny and a notice was issued under Section 143 (2) and 142(1) of the Income Tax Act (hereinafter referred to as the 'the Act', for brevity). The asessee filed a reply and the assessing officer noticed that the assessee has sold the immovable property along with sister for a total consideration of Rs. 11,00,50,000/- and the assessee's share was worked out to Rs. 6,90,00,000/- and after claiming cost inflation index and improvement of Rs. 13,49,752/- long term capital gain determined at Rs. 6,76,02,248/-. Against the long term capital gains, the assessee has claimed exemp....

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....ter in the instant case?" 4. The learned counsel for the assessee has straight away drawn the attention of this Court towards the judgment delivered by the Division Bench of this Court in the case of Commissioner of Income Tax vs. Vinay Mishra reported in [2020] 121 taxmann.com 243 (Karnataka) involving similar issue. Paras 6 to 8 of the aforesaid judgment reads as under: "6. We have considered the submissions made by learned counsel on both the sides and have perused the record. Admittedly, the dispute in the appeal pertains to Assessment year 2009-10 i.e., prior to amendment of Section 54F of the Act by the Finance Act, 2014 w.e.f. 01.04.2015. The seminal issue, which arises for consideration in this appeal is whether an assessee was r....

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.... years after that date constructed, one residential house in India (hereafter in this section referred to as the new asset), the capital gain shall be dealt within in accordance with the following provisions of this section, that is to say.- Thus, it is evident, that requirement of construction of a residential house in India in order to claim exemption under Section 54F(1) of the Act has been incorporated w.e.f. 01.04.2015. 7. Before proceeding further, we may advert to certain well settled legal principles. The Supreme Court in 'GOVIND DAS vs. I.T.O', (1976) 1 SCC 906 held that unless the terms of a statute expressly so provide or necessarily require it, retrospective operation should not be given to a statute so as to take away....

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...., 2015 and will accordingly apply in relation to Assessment year 2015-16 and subsequent Assessment years. Thus, it is axiomatic that residential property, for which investment is made needs to be situated in India for the purpose of claiming exemption under Section 54F from Assessment year 2015-16 only and not prior to that period. In the instant case, the investment in a residential house was made in USA prior to 01.04.2015, whereas, the requirement of making an investment in a residential house, which was incorporated by way of amendment, came into force w.e.f. 01.04.2015. In the light of aforesaid well settled legal principles as well as the memorandum of objects of Finance Act, 2014, which clearly provide that amendments will take eff....