9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (4) TMI 129 - HC - Income TaxExemption u/s 54F in respect of investment made in a house property in USA (foreign country) - Whether assessee has not fulfilled the conditions set out in the said section to avail benefit under the said provision as the assessee has invested in property outside India which cannot be said that assessee has satisfied the conditions set out in the said section? - HELD THAT - As decided in case of Commissioner of Income Tax vs. Vinay Mishra 2020 (9) TMI 96 - KARNATAKA HIGH COURT assessee has made investment in a residential house in USA (foreign country) prior to 01.04.2015 and would be entitled to claim exemption under Section 54F in respect of investment made in a house property in USA (foreign country). In the light of the judgment delivered by Division Bench of this Court, as the controversy involved has already been adjudicated, the questions of law are answered against the revenue and in favour of the assessee.
Issues:
1. Disallowance under Section 54F of the Income Tax Act for investment in property outside India. 2. Applicability of amended provisions of Section 54F from 1-4-2015 to assessment year 2013-14. Issue 1: Disallowance under Section 54F for investment in property outside India: The case involved an appeal arising from the Income Tax Appellate Tribunal's order regarding the disallowance made under Section 54F of the Income Tax Act. The assessee, a non-resident Indian, had claimed exemption under Section 54F by investing in residential property in New York. The assessing officer disallowed the claim, determining taxable capital gains. The Commissioner of Income Tax (Appeals) allowed the appeal, leading to a further appeal by the revenue before the Tribunal. The Tribunal dismissed both the revenue's appeal and the cross objection of the assessee. The substantial question of law raised was whether the Tribunal was correct in setting aside the disallowance under Section 54F, considering the assessee's investment in property outside India. The Court referred to a previous judgment by a Division Bench which held that investment in a residential house in a foreign country before 01.04.2015 entitled the assessee to claim exemption under Section 54F. The Court upheld this view and answered the questions of law against the revenue and in favor of the assessee, resulting in the dismissal of the appeal. Issue 2: Applicability of amended provisions of Section 54F from 1-4-2015 to assessment year 2013-14: The Court considered whether the Tribunal's order could be deemed as perverse for relying on amended provisions of Section 54F applicable from 1-4-2015 to the assessment year 2013-14 in question. The Division Bench referred to the relevant provisions of Section 54F pre and post the amendment effective from 01.04.2015, emphasizing the requirement of constructing a residential house in India to claim exemption under Section 54F(1). The Court highlighted the principle that unless expressly provided, statutes should not have retrospective operation to affect existing rights. It noted that the amendment requiring investment in a residential house in India for exemption under Section 54F came into force from 01.04.2015. The Court affirmed that the amendment was prospective and not applicable to investments made before that date. Citing legal principles and circulars, the Court concluded that the amendment's application was from Assessment year 2015-16 onwards. The Court aligned with the view taken by other High Courts and upheld the Division Bench's decision, dismissing the appeal. In summary, the High Court of Karnataka addressed the issues related to disallowance under Section 54F for investment in property outside India and the applicability of amended provisions of Section 54F from 1-4-2015 to the assessment year 2013-14. The Court upheld the assessee's right to claim exemption under Section 54F for investments made in a residential house in a foreign country before 01.04.2015, based on a previous Division Bench judgment. Additionally, the Court clarified that the amended provisions requiring investment in a residential house in India were prospective from 01.04.2015, not applicable to investments made prior to that date. The judgment emphasized the importance of statutory interpretation and the non-retrospective application of amendments affecting existing rights.
|
