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आदेश/Order
Per R.L. Negi, Judicial Member:
The Revenue has filed the present appeal against the order dated 06.07.2018 passed by Commissioner of Income Tax (Appeals)-43, New Delhi [for short ’the CIT(A)’] for the assessment year 2013-14, vide which the Ld. CIT(A) has dismissed the appeal filed by the Revenue against the assessment order passed u/s 143(3) of the Income Tax Act, 1961 [for short ’the Act’].
The brief facts emanating from the record and pleadings of the parties are that the assessee filed its return of income for the assessment year under consideration declaring the total income of Rs. 86,000/-. The
ITA No.1245-Chd-2018- Sh. Manjit Singh Baidwan, Chandigarh 2 AO passed the assessment order determining the total income of the
assessee at Rs. 4,72,98,280/- after making addition of Rs. 4,71,90,800/-
on account of disallowance of the exemption / deduction claimed by the
assessee u/s 54 of the Act and addition of Rs. 21,478/- i.e., on account
of difference of actual amount of interest received by the assessee and
the amount declared by the assessee. The assessee challenged the action
of the AO in making addition of Rs.4,72,98,280/- before the Ld. CIT(A).
The Ld. CIT(A) after hearing the assessee partly allowed the appeal of
and restricted the deduction to 50% of the investment made in
residential property amounting to Rs. 6,36,64,000/-. Against the said
findings of the ld. CIT(A) the Revenue is in appeal before this Tribunal.
The Revenue has challenged the impugned order passed by the ld.
CIT(A) on the following grounds: -
On the facts and in the circumstances of the case, whether the Ld. CIT (A) has erred on facts and in law by holding that claim of the assessee to get the benefit of deduction/s 54 for investment outside India be allowed. 2. On the facts and in the circumstances of the case, whether the Ld. CIT (A) has erred on facts and in law by holding that claim of the assessee to get the benefit of deduction/s 54 for investment outside India be allowed by ignoring the fact that intention of the legislature behind Sec 54 of the Income Tax Act, 1961 was to grant benefit to investment in residential house in India. 3. The appellant craves to add, amend, modify or alter any grounds of appeal at any time or before the hearing of the appeal.
Before us, the ld. Departmental Representative (DR) submitted
that the ld. CIT(A) has wrongly held that the assessee is entitled to get
ITA No.1245-Chd-2018- Sh. Manjit Singh Baidwan, Chandigarh 3 benefit of deduction u/s 54 of the Act for investment outside India
ignoring the intention of the legislature in making provisions under
section 54 of the Act. The ld. DR supporting the assessment order
submitted that the assessee purchased a residential house for a sum of
Rs. 636.64 lacs by raising a loan and utilizing the sale proceeds
amounting to Rs. 575 lacs received from sale of House No. 144, Sector
27A, Chandigarh. The entire gain on sale of the house property was
invested in purchasing residential house in Auckland, New Zealand.
Since the assessee had purchased the house outside India, the ld.
CIT(A) ought to have rejected the claim of the assessee u/s 54 of the
Act.
On the other hand, the ld. counsel for the assessee supporting the
order passed by the ld. CIT(A) submitted that since the order passed by
the ld. CIT(A) is based on the provisions of law and in accordance with
the judgement of the Hon'ble Gujarat High Court in the case of Leena
Jugal Kishore Shah Vs ACIT 392 ITR 0018 (Guj.) and the Chandigarh
Bench of the Tribunal in the case of Shri Jaswinder Singh Lota Vs
DCIT, ITA No. 802/Chd/2015 AY 2008-09, there is no infirmity in the
order of the ld. CIT(A) to interfere with the same.
We have heard the rival submissions of the parties and perused the
material on record including the cases relied upon by the ld. counsel.
The ld. CIT(A) has allowed the deductions u/s 54 of the Act basically
holding that the amended provisions have no retrospective application
ITA No.1245-Chd-2018- Sh. Manjit Singh Baidwan, Chandigarh 4 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 vs ACIT
and the decision of the coordinate Bench in the case of Shri Jaswinder
Singh Lota Vs DCIT (International Taxation) (supra). The coordinate
Bench has decided the identical issue in favour of the assessee in the
case of Shri Jaswinder Singh Lota Vs DCIT (supra) holding as under: -
“4.1 The Ld. AR in the course of the hearing had also filed copy of the order dated 15.02.2018 in ITA 3429/MUM/2016 in the case of Ashok Keshavlal Tejuja versus ACIT. Relying on the said decision it was submitted by the Ld. AR the decision being latest in point of time wherein the ITAT has relied on the decision of the Hon’ble Gujarat High Court and in the absence of any contrary decision, it was his prayer that the same may be followed. A perusal of the said order further brings out the fact that the coordinate Bench sitting at Mumbai took cognizance of an earlier order also of the Mumbai Bench in the case of IT0 versus Nishant Lalit Jadhav in ITA 68 83/Mum/2014 which also relied on the aforesaid decision. Accordingly, in the peculiar facts and circumstance of the present case which have been set out herein above considering the position of law as also discussed in detail in the earlier portion of this order, we find that in the 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
ITA No.1245-Chd-2018- Sh. Manjit Singh Baidwan, Chandigarh 5 allowed. Accordingly, the issue is restored back to the assessing officer with a direction to grant necessary relief in accordance with law.
Since the findings of the ld. CIT(A) are based on the ratio laid
down by the Hon'ble Gujarat High Court and the decision of the coordinate Bench in the cases referred / discussed above, we do not find any reason to interfere with the findings of the ld. CIT(A). Hence, in our considered view, there is no merit in the Revenue’s appeal. Accordingly, we uphold the findings of the ld. CIT(A) and dismiss the appeal of the Revenue. In the result, the appeal of the Revenue is dismissed.
Order pronounced on 26th October, 2021.
Sd/- Sd/-
( N.K. SAINI) (R.L.NEGI) उपा�य� /Vice President �या�यक सद�य/ Judicial Member Dated : 26.10 .2021 “आर.के.” आदेशक���त,ल-पअ.े-षत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकरआयु/त/ CIT 4. आयकरआयु/त (अपील)/ The CIT(A) 5. -वभागीय��त�न2ध, आयकरअपील%यआ2धकरण, च4डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड�फाईल/ Guard File
आदेशानुसार/ By order, सहायकपंजीकार/ Assistant Registrar