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TMI Blog2019 (3) TMI 160X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that of the Assessing Officer be restored. 3. The Appellant craves leave to amend or alter any ground or add a new ground which may be necessary." 2. Briefly stated, the assessee who is a non-resident Indian had filed his return of income for A.Y. 2014-15 on 28.07.2014, declaring total income at Rs. 8,03,790/-. Subsequently, the case of the assessee was selected for scrutiny assessment under Sec. 143(2). 3. During the year under consideration the assessee was in receipt of Income from capital gains and Income from other sources. On a perusal of the working of "Long Term Capital Gains" (for short 'LTCG'), it stood revealed that the assessee and his sister Mrs. Karina (Manisha) Mhatani had jointly sold a residential house property on 29.05.2013 for a consideration of Rs. 14,75,00,000/-. The share of LTCG in the hands of the assessee worked out at Rs. 7,16,78,788/-. It was observed by the A.O that the assessee had claimed the entire amount of LTCG arising from the sale of the aforesaid property as exempt under Sec. 54 of the IT Act on the ground that he had invested an amount of Rs. 7,68,93,288/- (i.e in excess of the LTCG) for purchase of a new residential house at Dubai i.e. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the ld. D.R that investment by the assessee towards purchase of a residential property in Dubai shifted the tax base from India which was not the intention of the legislature while enacting the said statutory provision. In sum and substance, it was the contention of the ld. D.R that the exemption envisaged in Sec. 54 was in respect of an investment made by an assessee towards purchase or construction of a new residential property in India and the same did not take within its sweep acquisition of a new residential property in a foreign land. 6. Per contra, the ld. Authorized Representative (for short 'A.R') for the assessee relied on the order passed by the CIT(A). It was submitted by the ld. A.R that prior to the amendment made available on the statute vide the Finance Act, 2014 i.e. w.e.f. 01.04.2015, there was no explicit requirement enshrined in Sec. 54 of the IT Act that investment towards purchase or construction of a new residential house was to be made only in India. It was the contention of the ld. A.R that no infirmity did emerge from the order of the CIT(A) who had rightly concluded by taking support of certain judicial pronouncements that the investment made by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the capital gain which is not appropriated by the assessee wards the purchase of the new asset made within one year before the date on which the transfer of the original asset took place, or which is not utilised by him for the purchase or construction of the new asset before the date of furnishing the return of income under section 139, shall be deposited by him before furnishing such return [such deposit being made in any case not later than the due date applicable in the case of the assessee for furnishing the return of income under sub-section (1) of section 139] in an account in any such bank or institution as may be specified in, and utilised in accordance with, any scheme which the Central Government may, by notification in the Official Gazette, frame in this behalf and such return shall be accompanied by proof of such deposit; and, for -purposes of sub-section (1), the amount, if any, already utilised by the assessee for the purchase or construction of the new asset together with the amount so deposited shall be deemed to be the cost of the new asset: Provided that if the amount deposited under this sub-section is not utilized wholly or partly for the purchase or constr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estment is made in purchase or construction of one residential house situated in India." We find that our aforesaid view is fortified by the judgment of the Hon'ble High Court of Gujarat in the case of Leena Jugalkishor Shah Vs. ACIT (2017) 392 ITR 18 (Guj), wherein the Hon'ble High Court in context of a similarly placed Sec. 54F had observed as under: "It is also not in dispute that the appellant has not purchased the resident ial house in Uni ted States of Amer ica. In fact, she has purchased a residential house in U.S.A. out of the capital gain on sale of the plot in India and thus she has fulf illed the conditions stipulated in section 54F of the Income-tax Act. She has invested the capital gains in a residential house within the stipulated time. There was no condi tion in section 54F of the Income - tax Act at the relevant time that the capi tal gain arising out of transfer of capital asset should be invested in a residential house situated India. The language of section 54F of the Income-tax Act before its amendment was that the assessee should invest capital gain in a residential house. It is only af ter the amendment to section 54F of the Income-tax Act by the Finance (N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and (ii). ITAT Bangalore in the case of Vinay Mishra Vs. ACIT (2013) 30 taxmann.com 341 (Bang). In the case of Vinay Mishra (supra) it was observed by the Tribunal that a plain reading of the provisions of Sec. 54F did not reveal anything which would suggest that the new residential house acquired should be situated in India. Rather, it was observed by the Tribunal that the word 'in India' cannot be read into Sec. 54F (as was then available on the statute), specifically when the parliament in its legislative wisdom had deliberately not used the said words in Sec. 54F. We also find that the Authority of Advance Rulings (for short 'AAR') in the case of Dipankar Mohan Ghosh, in re (2018) 401 ITR 129 (AAR) following the view taken by the Hon'ble High Court of Gujarat in the case of Leena Jugalkishor Shah Vs. ACIT (2017) 392 ITR 18 (Guj), had concluded that the benefit of Sec. 54F before its amendment extended to a residential house that was purchased by the assessee outside India. 8. We have deliberated at length on the issue before us and are of the considered view that as per the pre-amended Sec. 54 of the IT Act (i.e prior to its amendment by the Finance (No. 2) Act, 2014 w. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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