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TMI Blog2013 (9) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... s which resulted in long-term capital gains (LTCG). The assessee invested the entire capital gains in the acquisition of a house property in the United States of America and claimed exemption under section 54F of the Act. The Assessing Officer called upon the assessee to substantiate his claim for exemption under section 54F particularly in view of the fact that the asset purchased is outside India. The assessee submitted that he is eligible to claim deduction under section 54F of the Act notwithstanding the fact that the asset purchased is outside India, in the USA and relied on a decision of the Mumbai Bench of the Tribunal in the case of Mrs. Prema P. Shah and Sanjiv P. Shah v. ITO reported in [2006] 282 ITR (AT) 211 (Mumbai). The Assessing Officer did not agree with the contentions of the assessee on the ground that the Act is applicable only to the whole of India and therefore on a plain reading of the provisions, the purchase/construction of a residential house must necessarily be in India and not outside India and rejected the claim for exemption under section 54F of the Act. In come to this finding the Assessing Officer also relied on the decision of the Ahmedabad Bench of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emption in respect of the houses bought or constructed in India only, and not if the investment is made in house property abroad. 5. The Commissioner of Income-tax (Appeals) erred in holding that the decision of the Mumbai Bench of the hon'ble Tribunal in the case of Mrs. Prema P. Shah [2006] 282 ITR (AT) 211 (Mumbai) is not applicable to the assessee's case and went wrong in further holding that the said decision is applicable only to the assessee's who are non residents. 6. The Commissioner of Income-tax (Appeals) is erred following the decision in Leena J. Shah [2006] 6 SOT 721 (Ahd) which is clearly distinguishable. Reliance placed by him on section 115F of the Act is not called for in the present facts of the case. 7. The Commissioner of Income-tax (Appeals) erred in not considering the submissions made during the course of appellate proceedings in its entirety and in its proper perspective." The grounds raised in this appeal require us to deal with the only issue of whether the assessee is eligible to avail of exemption under section 54F of the Act in the facts and circumstances of the case. Learned counsel for the assessee submitted that sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the provision which is not there. It amounts to the court legislating when Parliament has deliberately not used those words in the said section. That is the view taken by the hon'ble Madras High Court and the hon'ble Punjab and Haryana High Court and we respectfully agree with the view expressed in the aforesaid judgments. 8. In the instant case the assessee has purchased the property jointly with her husband. She has invested the money in rural bonds jointly with her husband. It is nobody's case that her husband contributed any portion of the consideration for acquisition of the property as well as bonds. The source for acquisition of the property and the bonds is the sale consideration. It is not in dispute. Once the sale consideration is utilised for the purpose mentioned under sections 54 and 54EC, the assessee is entitled to the benefit of those provisions. As the entire consideration has flown from the assessee and no consideration has flown from her husband, merely because either in the sale deed or in the bond her husband's name is also mentioned in law he would not have any right. In that view of the matter, the assessee cannot be denied the be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n a parity of reasoning, the house property purchased by the assessee in the U. S. A. from out of the sale proceeds of the long-term capital asset satisfies the conditions under section 54F of the Act. Learned counsel for the assessee contended that when the Income-tax Act, 1961 taxes the income of a resident on the sale of house property situated outside India, then the logical consequence of such a power is to confer upon such a person all the benefits that flow from the provisions of the Act on investment in house property situated outside India unless specifically prohibited. It is submitted by learned counsel for the assessee that in any event since there are two views possible on the interpretation of the provisions of section 54F of the Act, the one which is beneficial to the tax payer should be preferred. In support of this proposition, learned counsel for the assessee relied on the judgments in the decision of the hon'ble apex court in the case of CIT v. Strawboard Mfg. Co. Ltd. reported in [1989] 177 ITR 431 (SC) and of the decision of the Ahmedabad Bench of the Tribunal in the case of Asst. CIT v. Vodafone Essar Gujarat Ltd. reported in [2010] 131 TTJ (Ahd) 544. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned order of the learned Commissioner of Income-tax (Appeals) and the rival written submissions made. The provisions of section 54F of the Act reads as under : "...... where in the case of an assessee being an individual or a Hindu undivided family, the capital gain arises from the transfer of a long-term capital asset, being buildings or lands appurtenant thereto, and being a residential house, the income of which is chargeable under the head 'Income from house property' (hereafter in this section referred to as the original asset), and the assessee has within a period of one year before or two years, after the date on which the transfer took place purchased, or has within a period of three years after that date constructed, a residential house, then, instead of the capital gain being charged to income-tax as income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section." According to the Assessing Officer, the assessee has complied with all the conditions stipulated in section 54F of the Act, except that the new asset, the residential house acquired, is situated outside India. The A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. Girish M. Shah noted the order of the Ahmedabad Bench of the Tribunal in the case of Leena J. Shah [2006] 6 SOT 721 (Ahd) but still preferred to follow the order of the Mumbai Income-tax Appellate Tribunal in the case of Mrs. Prema P. Shah and Sanjiv P. Shah [2006] 282 ITR (AT) 211 (Mumbai). On a plain reading of the provisions of section 54F of the Act, we do not find anything therein to suggest that the new residential house acquired should be situated in India. The jurisdictional High Court in the case of Director of Income-tax (International Taxation) v. Mrs. Jennifer Bhide [2012] 349 ITR 80 (Karn) in I. T. A. No. 169 of 2011 has held that introducing a word which is not there into a section amounts to legislating when Parliament has not used these words in the said section. In view of this decision, we are precluded from reading the words "in India" into section 54F of the Act, when Parliament in its legislative wisdom has deliberately not used the word "in India" in section 54F of the Act. Therefore, in view of the discussion above, we follow the latter decisions of the Mumbai Benches of the Income-tax Appellate Tribunal in the cases of Mrs. Prema P. Shah and Sanjiv P. Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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