2018 (8) TMI 1359 - AT - Income Tax

Exemption u/s 54/ 54F - purchase of residential property / house outside India - assessment year in this appeal is 2014-15 and the provision in section 54F comes w.e.f. 01.04.2015 - Held that - before the amendments, the benefit can also be given to the residential house acquired in abroad. - Since the Tribunal has taken a view in similar set of facts, we find no justification to take a contrary view in this appeal. Accordingly, following the same, we hold that the assessee is entitled for deduction under section 54F of the Act. - Decided against the revenue.

Summary

Issues:
1. Interpretation of statutory provisions of section 54 regarding the requirement for a residential house to be in India.
2. Consideration of settled rulings on the location of the residential house for tax benefits.
3. Examination of the Memorandum explaining provisions in the Finance Bill 1982 and Finance(No.2) Bill 2014 regarding the intent of encouraging house construction in India.
4. Rejection of decisions by the Jurisdictional Tribunal in specific cases pending before the High Court.
5. Appeal by Revenue against the order of the Commissioner of Income Tax(Appeals) -12, Bengaluru.

Analysis:

Issue 1:
The appeal raised concerns about the requirement for the residential house to be in India as per section 54. The Tribunal examined the amendment in section 54F effective from 01.04.2015, clarifying the acquisition of the residential house only in India. The Tribunal referenced the case law to support the interpretation of the plain language of the statute, emphasizing adherence to the legislative intent without adding extraneous conditions.

Issue 2:
The Tribunal considered settled rulings, including cases like ACIT Vs. Iqbal Jafar and Vinay Mishra Vs. ACIT, in favor of the assessee regarding the location of the residential house for tax benefits. The Tribunal highlighted that the legislative wording did not explicitly limit the benefit to houses in India, leading to the allowance of exemptions for properties acquired outside India if all other conditions were satisfied.

Issue 3:
The Memorandum explaining the provisions of the Finance Bills emphasized the encouragement of house construction in India for availing benefits under section 54. However, the Tribunal's analysis of various judicial pronouncements supported the view that the absence of the phrase "in India" in section 54F allowed for exemptions even for properties outside India, as long as statutory conditions were met.

Issue 4:
The Tribunal addressed the rejection of decisions by the Jurisdictional Tribunal in specific cases pending before the High Court. Despite the pending status of those cases, the Tribunal relied on consistent judicial interpretations favoring the assessee's entitlement to exemptions under section 54F for properties outside India.

Issue 5:
The Tribunal dismissed the Revenue's appeal against the order of the Commissioner of Income Tax(Appeals) -12, Bengaluru, based on the established legal principles and interpretations supporting the assessee's claim for deduction under section 54F. The decision was in line with previous judgments and upheld the CIT(A)'s ruling, confirming the assessee's entitlement to the exemption.

In conclusion, the Tribunal's detailed analysis and reliance on legal precedents underscored the importance of interpreting tax statutes based on their plain language and legislative intent, ultimately leading to the dismissal of the Revenue's appeal and upholding the assessee's entitlement to the deduction under section 54F.