INCOME TAX OFFICER (INTERNATIONAL TAXATION) 4(2)(1), MUMBAI vs. VIJAYKUMAR K SOPARKAR, MUMBAI

O R D E R PER C.N. PRASAD (JM) This appeal is filed by the Revenue against the order of the Learned Commissioner of Income Tax (Appeals)-58, Mumbai [hereinafter in short “Ld.CIT(A)”] in Appeal No. CIT(A)-58/ITO(IT)-4(2)(2)/2016-17/16-F dated 18.10.2017 for the Assessment Year 2013-14.

(A.Y: 2013-14) Shri Vijaykumar K. Soparkar property, the indexed cost of acquisition has to be computed with reference to the year in which the previous owner first held the asset and not the year in which the assessee became the owner of the asset." 2) "On the facts and in the circumstances of the case and in law. the Learned CIT(A) erred in not adopting a 'literal interpretation' in case of tax statutes whereas the Explanation (iii) to section 48 of the Act clearly mentions that for computing the indexed cost of acquisition, the base year has to be the first year in which the asset was held by the "assessee" and not the previous owner of the asset and thus going against the decision of the Hon'ble Jurisdictional High Court in the case of M/s. Vodafone India Services Pvt Ltd. vs. Union of India & Ors. (W.P No. 871 of 2014) (Bom) wherein it has been stated that there is no intendment in tax laws." 3) "On the facts and in the circumstances of the case and in law, the Learned CIT(A) erred in not appreciating the fact that the exemption u/s 54 is allowed on capital gains to ensure the purpose of investment in residential property only in India." 4) "On the facts and circumstances of the case and in law, the Ld CIT(A) erred in not appreciating the fact that that reference to section 54 has been made in section 45 of the Act itself, which is the charging section for income under the head 'capital gains' and all the charging sections for different heads of income are in consonance with section 4, which does not include the words 'in India' and these words are automatically read in the context of these charging sections on account of section 5(2) of the Act in the case of Non- resident, while remain free of this connotation in case of residents on account of section 5(1) of the act which allows for charging income accruing or arising outside India." 5) "On the facts and circumstances of the case and in law, the Ld CIT(A) erred in not appreciating the fact that the provisions of section 54 contain machinery provisions that may fail if the assessee invests in a property outside India, and there is no Jurisdictional machinery to ascertain the same from the Non-resident." 6) "On the facts and circumstances of the case and in law, the Ld CIT(A) erred in not appreciating the fact that the Finance (No.2) Act, 2014 inserted the words (in India' into section 54(1) with effect from 01.04.2015, which was only clarificatory in nature as is apparent from the phrase 'the benefit was intended for investment in one residential house within India’ used in the Memorandum to the Finance Bill, and that the Hon'ble Apex Court in the case of Allied Motors Pvt. Ltd., v. CIT (224 ITR 677) has already held that when a proviso is inserted to remedy unintended consequences and to make the provision workable, it could be read as retrospective, and which has been followed by the Hon'ble ITAT 'F' Bench in for AY 2009- 10, in the case of Fiduciary Shares & Stock P. Ltd. vs. ACIT."

(A.Y: 2013-14) Shri Vijaykumar K. Soparkar 7) "Without prejudice to the above ground number 6, and on the facts and circumstances of the case and in law, the Ld CIT(A) erred in not appreciating the fact that the words {in India' were already operating in the background in all the charging sections applicable to income of Nonresidents, including section 45." 8) The Appellant prays that the order of the CIT(A) be set aside on the above ground and that of the Assessing Officer be restored.”

Order Pronounced in the virtual Court on the 03rd December, 2020