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Income Tax Appellate Tribunal, “B” BENCH : BANGALORE
Before: SHRI ARUN KUMAR GARODIA & SMT. BEENA PILLAI
O R D E R
Per Shri A.K. Garodia, Accountant Member
This appeal is filed by the revenue and the same is directed against the order of ld. CIT(A)-12, Bangalore dated 19.06.2018 for Assessment Year 2014-15.
The grounds raised
by the revenue are as under. “1. The order of the learned Commissioner of Income Tax (Appeals)- 12, Bengaluru is contrary to the law and facts of the case.
2. The learned Commissioner of Income Tax (Appeals)-12, Bengaluru ought to have considered the fact that in view of the statutory provisions of section 54F, the residential house must be in India.
3. The learned Commissioner of Income Tax (Appeals)-12, Bengaluru failed to appreciate the fact that in view of settled ruling of interpretation of tax statute, the residential house purchased/constructed must be in India and not outside India.
4. The learned Commissioner of Income Tax (Appeals)-12, Bengaluru Page 2 of 3 failed to consider the Memorandum explaining provisions in the Finance Bill 1982 that the exemption in section 54F is granted with a view to encouraging house construction. This would naturally mean that house construction/purchase would be encouraged by provisions of this section in India and not outside India.
5. The learned Commissioner of Income Tax (Appeals)-12, Bengaluru failed to consider the fact that the decision of the Bangalore ITAT in the case of Sri. Vinay Mishra v ACIT 30 Taxmann.com 341 has not yet become final and the same is still pending before the Hon'ble High Court of Karnataka.
For these and other grounds that may be adduced at the time of hearing, it is prayed that the order of the learned Commissioner of Income Tax (Appeals) -12, Bengaluru may be cancelled and that of the AO may be restored.”
The ld. DR of revenue supported the assessment order whereas the ld. AR of assessee supported the order of ld. CIT(A). He also submitted that even as per ground no. 5 raised by the revenue, this is the stand taken by the revenue that the Tribunal order rendered in the case of Sri. Vinay Mishra Vs. ACIT as reported in 30 taxmann.com 341 has not become final because appeal is filed by the revenue before Hon'ble Karnataka High Court which is still pending. He submitted that this is not the case of the revenue that issue in dispute is not covered by this Tribunal order. He further submitted that this is also not the case of the revenue that Hon’ble High Court has stayed the operation of this Tribunal order and hence, the appeal of the revenue should be dismissed.
We have considered the rival submissions. We find that in para 5.3 of his order, it is noted by ld. CIT(A) that the assessee has purchased the property in USA in Financial Year 2013-14 and the amendment brought on the statute book is applicable w.e.f. 01.04.2015 as per which it has been specified that for claiming deduction u/s. 54 of the IT Act, the residential house has to be purchased or constructed in India but in the relevant period, such condition was not there that it should be in India. In the same para, the ld. CIT(A) has followed the Tribunal order rendered in the case of Sri. Vinay Mishra Vs. ACIT (supra) in which it is held by the Tribunal that the investment in the residential house situated outside India is also eligible for exemption u/s. 54F of the IT
Page 3 of 3 Act. In view of these facts and legal position, we find no reason to interfere in the order of ld. CIT(A).
In the result, the appeal filed by the revenue is dismissed. Order pronounced in the open court on the date mentioned on the caption page.