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2021 (11) TMI 91 - AT - Income TaxDeductions u/s. 54 - assessee had purchased the house outside India - Scope of amended provisions - HELD THAT - CIT(A) has allowed the deductions u/s. 54 of the Act basically holding that the amended provisions have no retrospective application as the claim of the assessee pertains to the assessment year 2013-14, whereas, the amendment was made applicable w.e.f. 01.04.2015. As pointed out by the ld. counsel, the ld. CIT(A) has decided the issue involved in the present case by following the judgement of the Hon'ble Gujarat High Court in the case of Leena Jugal Kishore Shah 2016 (12) TMI 351 - GUJARAT HIGH COURT and case of Shri Jaswinder Singh Lota 2018 (3) TMI 1942 - ITAT CHANDIGARH . Peculiar facts of the present case the claim of the assessee has to be allowed. It is seen that the amendment by the Finance Act of 2014 in section 54F comes into effect only from 01/04/2015. Thus, from the said date the benefit of deduction under section 54F for investments made outside India undisputedly can be denied as it can be said to be limited to the investment in residential house property made only within India. However, prior to the said date when the amendment kicks in, there is no statutory bar for the taxpayer to make investments outside India in residential house property in order to get the benefit of deductions 54F provided other conditions were fulfilled. Thus, since the assessment year under consideration is prior to the amendment of section 54F by the Finance Act, 2014 the law as on date stands that the claim of the assessee has to be allowed. - Decided in favour of assessee.
Issues:
1. Disallowance of exemption/deduction claimed by the assessee u/s. 54 of the Income Tax Act, 1961. 2. Interpretation of the provisions of section 54 for investment outside India. Analysis: 1. The Revenue filed an appeal against the order passed by the Commissioner of Income Tax (Appeals) for the assessment year 2013-14, where the assessee's total income was determined at a higher amount by the Assessing Officer due to disallowance of exemption/deduction claimed u/s. 54 of the Act. The CIT(A) partly allowed the appeal and restricted the deduction to 50% of the investment made in residential property. The Revenue challenged this decision before the Tribunal. 2. The main issue raised by the Revenue was whether the claim of the assessee to get the benefit of deduction u/s. 54 for investment outside India should be allowed. The Revenue argued that the intention of the legislature behind section 54 was to grant benefits for investment in residential houses in India. The Departmental Representative contended that since the assessee purchased a residential house in New Zealand with the sale proceeds from a property in India, the claim u/s. 54 should be rejected. 3. The counsel for the assessee, on the other hand, supported the CIT(A)'s order, citing judgments of the Hon'ble Gujarat High Court and the Chandigarh Bench of the Tribunal. The Tribunal noted that the CIT(A) allowed the deductions u/s. 54 based on the non-retrospective application of the amended provisions, which were made applicable from 01.04.2015. The Tribunal found no infirmity in the CIT(A)'s order and referred to previous decisions supporting the allowance of deductions for investments made outside India before the amendment. 4. The Tribunal upheld the CIT(A)'s decision, stating that since the findings were based on judgments of the Hon'ble Gujarat High Court and the coordinate Bench, there was no reason to interfere. The Tribunal concluded that there was no merit in the Revenue's appeal and dismissed it accordingly. In conclusion, the Tribunal dismissed the Revenue's appeal, affirming the CIT(A)'s decision to allow deductions u/s. 54 for investments made outside India based on the non-retrospective application of the amended provisions.
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