ITO, CHENNAI V. Saroja Naidu, Theni

ITA 375/CHNY/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8062 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-11-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 08-08-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 18-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Assessee Lawyers: S SRIDHAR
• Keywords: Capital asset; Gift; Cost of acquisition
• Section: 143(3); 54F; 54

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B B ENCH, CHENNAI . . . , . , & BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NOS.375/MDS/2015 ( / ASSESSMENT YEAR: 2010-11) THE INCOME TAX OFFICER, INTERNATIONAL TAXATION-2(1) 121, M.G.ROAD, CHENNAI-600 034. VS MRS. SAROJA NAIDU, 10/6, NRT ROAD, NRT NAGAR, THENI-625 531. PAN:AHUPN4186D ( /APPELLANT) ( /RESPONDENT) & ./ I.T.A.NOS.281/MDS/2015 ( / ASSESSMENT YEAR: 2010-11) MRS. SAROJA NAIDU, 10/6, NRT ROAD, NRT NAGAR, THENI-625 531. VS THE INCOME TAX OFFICER, INTERNATIONAL TAXATION-2(1) 121, M.G.ROAD, CHENNAI-600 034. PAN:AHUPN4186D ( /APPELLANT) ( /RESPONDENT) REVENUE BY : MR. SUPRIYO PAL, JCIT ASSESSEE BY : MR. S.SRIDHAR, ADVOCATE /DATE OF HEARING : 9 TH AUGUST, 2016 /DATE OF PRONOUNCEMENT : 2 ND NOVEMBER, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THESE TWO APPEALS ARE FILED BY THE REVENUE AND ASSESSEE RESPECTIVELY AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-16, CHENNAI DAT ED 30.12.2014 IN ITA NO.60/13-14 (OLD NO.918/13-14)(A )-16 PASSED UNDER SECTION 143(3) OF THE ACT. SINCE BOTH THE APPEALS PERTAIN TO THE SAME ASSESSEE, THEY ARE HEAR D 2 ITA NOS. 375 & 281/MDS/2015 TOGETHER AND DISPOSED OFF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. I.T.A.NO.375/MDS/2015 (REVENUE APPEAL): 2. THOUGH THE REVENUE HAS RAISED SEVERAL GROUNDS IN ITS APPEAL, THE CRUX OF THE ISSUE IS THA T - THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN DIRECTING THE LEARNED ASSESSING OFFICER TO RE-COMPUTE THE CAPITAL GAINS BY ADOPTING THE INDEXED COST OF ACQUISITION WITH REFERENCE TO THE YEAR IN WHICH PREVIOUS OWNER FIRST HELD THE ASSET AND NOT THE YEAR IN WHICH THE ASSESSEE BECAME OWNER OF THE ASSET BY WAY OF INHERITANCE. I.T.A.NO.281/MDS/2015 (ASSESSEES APPEAL): 3. THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN HER APPEAL, HOWEVER THE CRUXES OF THE ISSUES ARE AS FOLLOWS:- I) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN SUSTAINING THE ORDER OF THE LEARNED ASSESSING OFFICER WHO HAD DISALLOWED ` 1,50,00,000/- BEING INVESTMENT CLAIMED AS DEDUCTION UNDER SECTION 54 OF THE ACT BECAUSE THE NEW ASSET WAS PURCHASED BEYOND THE PERIOD OF TWO YEARS. II) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN SUSTAINING THE ORDER OF THE LEARNED ASSESSING OFFICER WHO HAD 3 ITA NOS. 375 & 281/MDS/2015 DISALLOWED THE CLAIM OF EXEMPTION UNDER SECTION 54 OF THE ACT IN RESPECT OF INVESTMENT IN HOUSE PROPERTY OUTSIDE INDIA FOR RS.2,05,92,000/-. 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A NON- RESIDENT INDIVIDUAL FILED HER RETURN OF INCOME FOR THE ASSESSMENT YEAR 2010-11 ON 26.07.2010 ADMITTING TO TAL INCOME OF ` 7,568/-. THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) WAS ISSUED TO THE ASSES SEE ON 29.08.2011. SUBSEQUENTLY, THE ASSESSMENT WAS COMPLE TED BY THE LEARNED ASSESSING OFFICER UNDER SECTION 143( 3) OF THE ACT ON 28.03.2013 WHEREIN HE COMPUTED THE LONG TERM CAPITAL GAIN OF THE ASSESSEE BY:- I) TREATING THE COST OF ACQUISITION OF THE ASSET F OR THE PURPOSE OF INDEXATION FROM THE DATE THE ASSESSEE OW NED THE PROPERTY THROUGH FAMILY PARTITION AND NOT FROM THE DATE THE PROPERTY WAS FIRST ACQUIRED. II) REJECTING THE CLAIM OF DEDUCTION UNDER SECTION 54 OF THE ACT FOR RS.1,50,00,000/- BECAUSE THE NEW ASSET WAS CONSTRUCTED BEYOND THE PERIOD OF THREE YEARS FROM T HE SALE OF THE ORIGINAL ASSET. 4 ITA NOS. 375 & 281/MDS/2015 III) REJECTING THE CLAIM OF DEDUCTION UNDER SECTION 54 OF THE ACT FOR RS.2,05,92,000/- SINCE THE RESIDENTIAL HOUSE WAS PURCHASED OUTSIDE INDIA (USA) ON 22.07.2010. 5. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) HELD THAT FOR THE PURPOSE OF COMPUTING CA PITAL GAIN, INDEXED COST OF ACQUISITION HAS TO BE COMPUTED WITH REFERENCE TO THE YEAR IN WHICH THE PREVIOUS OWNER F IRST HELD THAT ASSET AND NOT THE YEAR IN WHICH THE ASSESSEE B ECAME OWNER OF THE ASSET BY WAY OF INHERITANCE. HOWEVER, ON THE ISSUE WITH RESPECT TO DEDUCTION UNDER SECTION 54 OF THE ACT FOR RS.1,50,00,000/- AND RS.2,05,92,000/-, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) SUSTAINED THE ORDER OF THE LEARNED ASSESSING OFFICER. AGGRIEVED BY THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX BOTH THE PARTIES ARE IN APPEAL BEFORE US. I.T.A.NO.375/MDS/2015 (REVENUES APPEAL): GROUND : DATE OF ACQUISITION IN THE CASE OF INHERIT ANCE OF ASSET FOR THE PURPOSE OF CALCULATING INDEXED COST OF ACQUISITION WHILE CALCULATING CAPITAL GAINS: 5 ITA NOS. 375 & 281/MDS/2015 6.1 THE ASSESSEE IS A NON-RESIDENT DURING THE RELE VANT ASSESSMENT YEAR, SOLD HER RESIDENTIAL HOUSE PROPERT Y AT DOOR NO.14, 1 ST STREET, GANAPATHY COLONY ROYAPETTAH , CHENNAI FOR RS.3,15,00,000/- VIDE SALE DEED DATED 03.06.200 9. THE GUIDELINE VALUE OF THE PROPERTY ADOPTED FOR THE PUR POSE OF STAMP DUTY WAS RS.4,32,52,800/-. FOR THE PURPOSE OF COMPUTING CAPITAL GAIN AND INDEXATION, THE ASSESSEE ADOPTED THE DATE OF ACQUISITION OF THE PROPERTY AS 01/04/19 81 SINCE SHE HAD ACQUIRED THE PROPERTY BY INHERITANCE THROUG H FAMILY PARTITION DATED 28.02.2008 AND THE PREVIOUS OWNER H AD ACQUIRED THE PROPERTY ON 03.01.1967. THE LEARNED A SSESSING OFFICER WAS OF THE VIEW THAT THE COST OF ACQUISITIO N OF THE ASSET HAS TO BE TAKEN AS 28.02.2008 BECAUSE SHE HAD BECOME THE OWNER OF THE PROPERTY ONLY ON THAT DATE AND ACCORDINGLY ALLOWED THE BENEFIT OF INDEXATION FROM THE FINANCIAL YEAR 2008-09 AS PER SECTION 48 EXPLANATIO N (III) OF THE ACT. 6.2 ON APPEAL, THE LEARNED COMMISSIONER OF INCOME T AX (APPEALS) FOLLOWING THE DECISION OF THE HONBLE HIG H COURT OF BOMBAY IN THE CASE CIT VS. MANJULA J.SHAH REPORTED IN 355 6 ITA NOS. 375 & 281/MDS/2015 ITR 474 HELD THAT WHILE COMPUTING THE CAPITAL GAIN S ARISING ON TRANSFER OF A CAPITAL ASSET ACQUIRED BY THE ASSE SSEE UNDER A GIFT, THE INDEXED COST OF ACQUISITION HAS TO BE C OMPUTED WITH REFERENCE TO THE YEAR IN WHICH THE PREVIOUS OWNER F IRST HELD THE ASSET AND NOT THE YEAR IN WHICH THE ASSESSEE BE CAME THE OWNER OF THE ASSET. 6.3 SINCE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ONLY FOLLOWED THE DECISION OF THE HON BLE HIGH COURT OF BOMBAY IN ARRIVING AT HIS DECISION, WE DO NOT FIND IT NECESSARY TO INTERFERE WITH THE ORDER OF THE LEARNE D COMMISSIONER OF INCOME TAX (APPEALS) ON THIS ISSUE. ITA NO.281/MDS/2015 - (ASSESSEES APPEAL): GROUND NO.1 : DISALLOWANCE OF ` `` ` 1,50,00,000/- BEING INVESTMENT CLAIMED AS DEDUCTION UNDER SECTION 54 O F THE ACT: 7.1 THE ASSESSEE HAD INITIALLY INVESTED RS.1,50,00,000/ - IN CAPITAL GAIN SCHEME ACCOUNT WITH STATE BANK OF INDI A AND SUBSEQUENTLY UTILIZED THE AMOUNT BY ENTERING INTO A N AGREEMENT WITH THE BUILDER M/S. LANDMARK CONSTRU CTIONS FOR BOOKING A RESIDENTIAL FLAT IN THE PROJECT TIRV OLI ON 7 ITA NOS. 375 & 281/MDS/2015 27.08.2010, THE TOTAL COST OF WHICH WAS RS.3,55,61 ,935/-, AND THE CONSTRUCTION WAS LIKELY TO BE COMPLETED BY SEPTEMBER, 2014. BUT SINCE THE PROJECT WAS DELAYED DUE TO HITCHES IN APPROVAL, THE ASSESSEE SWITCHED OVER TO ANOTHER PROPERTY OF THE SAME BUILDER AND ENTERED INTO AN AG REEMENT DATED 27.01.2011 FOR PURCHASE OF A FLAT IN PROJECT VERTILA . AS THE PROJECT VERTILA WAS A MEGA PROJECT, IT COULD NOT BE COMPLETED IN TIME WHICH EXTENDED BEYOND THE PERIOD OF THREE YEARS AS PRESCRIBED UNDER THE ACT. THEREFORE, TH E LEARNED ASSESSING OFFICER DISALLOWED THE CLAIM OF DEDUCTION UNDER SECTION 54 OF THE ACT TO THE ASSESSEE. 7.2 BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) THE ASSESSEE RELIED IN THE DECISION OF TH E CHENNAI BENCH OF THE TRIBUNAL MRS. SEETHA SUBRAMANIAN VS. ACIT REPORTED IN 59 ITD 94, HOWEVER, THE LEARNED COMMISS IONER OF INCOME TAX (APPEALS) DISTINGUISHED THE SAME AND HEL D THE ISSUE AGAINST THE ASSESSEE BECAUSE THERE WAS NO EVI DENCE THAT THE CONSTRUCTION OF THE ASSESSEES FLAT WAS SU BSTANTIALLY COMPLETED. 8 ITA NOS. 375 & 281/MDS/2015 7.3 BEFORE US, THE LEARNED AUTHORIZED REPRESENTATIV E REITERATED HIS ARGUMENTS MADE BEFORE THE LEARNED AS SESSING OFFICER THAT THE ASSESSEE HAD MADE THE PAYMENT OF RS.1,50,00,000/- TO THE BUILDER WITHIN THE PRESCRIB ED TIME LIMIT PRESCRIBED UNDER THE ACT AFTER WITHDRAWING THE SAME FROM THE CAPITAL GAIN SCHEME ACCOUNT, AND THEREFORE THE ASSE SSEE WOULD BE ENTITLED TO THE BENEFIT OF DEDUCTION UNDER SECTION 54 OF THE ACT. THE LD.A.R FURTHER ARGUED BY STATING TH AT THE ASSESSEE HAD COMPLIED WITH THE CONDITIONS AND CANNO T BE HELD RESPONSIBLE FOR THE FAULT OF THE BUILDER. THE LEARNED AUTHORIZED REPRESENTATIVE FURTHER RELIED ON THE CIR CULAR NO.471 & 672 DATED 15.10.1986 & 16.12.1993 RESPEC TIVELY AND ALSO ON THE FOLLOWING DECISIONS:- I) SHAHJI VERMA VS CIT (224 ITR 107) (MP) II) MRS. SEETHA SUBRAMANIAN VS. ACIT (59 94 ITAT MAD III) CIT VS.SAMNANDAM UDYAKUMAR (345 ITR 389)(KAR) 7.4 THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND, RELIED ON THE ORDERS OF THE REVENUE AUTHORITI ES AND ARGUED IN SUPPORT OF THE SAME. 9 ITA NOS. 375 & 281/MDS/2015 7.5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIALS ON RECORD. FROM THE FACTS OF THE CASE, IT IS APPARENT THAT THE ASSESSEE HAD MADE THE INVESTMENT OF RS.1,50,00,000/- FOR CONSTRUCTION OF THE FLAT BY MA KING PAYMENT TO THE BUILDER. THE BUILDER HAD DEFAULTED D UE TO WHICH THE DELAY HAD OCCURRED IN CONSTRUCTION OF THE FLAT WITHIN THE TIME LIMIT PRESCRIBED UNDER THE ACT. THE FAULT OF THE BUILDER IS BEYOND THE CONTROL OF THE ASSESSEE WHOSE INTENTI ON WAS ONLY BONAFIDE TO COMPLY WITH THE PROVISIONS OF THE ACT FOR ENTITLING THE BENEFIT OF DEDUCTION UNDER SECTION 54 OF THE ACT. IN THIS SITUATION WE FIND THAT THE DECISION OF THE HONBLE MADHYA PRADESH HIGH COURT IN THE CASE SMT. SHASI VA RMA VS. CIT REPORTED IN 224 ITR 106 CITED BY THE LEARNE D AUTHORIZED REPRESENTATIVE IS RELEVANT. THE HONBLE HIGH COURT HAD HELD THE ISSUE AS FOLLOWS:- HELD THAT THE CBDT HAD ISSUED CIRCULAR NO.471 DATED 15.10.1986 STATING THAT CASES OF ALLOTMENT OF FLATS UNDER THE SELF-FINANCIAL SCHEME OF THE DELHI DEVELOPMENT AUTHORITY SHALL BE TREATED AS CASES OF CONSTRUCTION FOR THE PURPOSE OF CAPITAL GAINS. SECTION 54 OF THE ACT SAYS THAT WITHIN TWO YEARS OF SALE THE ASSESSEE SHOULD H AVE CONSTRUCTED THE HOUSE BUT IT DOES NOT MEAN THAT THE CONSTRUCTION SHOULD NECESSARILY BE COMPLETE WITHIN TWO YEARS. IF SUBSTANTIAL INVESTMENT WAS MADE IN THE CONSTRUCTION OF THE HOUSE, IT AMOUNTED TO SUFFICIEN T 10 ITA NOS. 375 & 281/MDS/2015 STEPS BEING TAKEN THUS SATISFYING THE REQUIREMENTS OF SECTION 54. THE TRIBUNAL WAS NOT JUSTIFIED IN DENYI NG EXEMPTION UNDER SECTION 54 TO THE ASSESSEE. 7.6 IN THE CASE OF THE ASSESSEE ALSO THE FACTS ARE MORE OR LESS IDENTICAL BECAUSE THE ASSESSEE HAD MADE THE PA YMENT TO THE BUILDER AND IT WAS BEYOND HER CONTROL TO COM PEL THE BUILDER TO COMPLY WITH THE TERMS AND CONDITIONS OF THE INITIAL AGREEMENT SHE ENTERED WITH THE BUILDER FOR CONSTRUC TING HER RESIDENTIAL FLAT. THEREFORE, FOLLOWING THE ABOVE ME NTIONED DECISION OF THE HONBLE MADHYA PRADESH HIGH COURT, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE IS ENTITLE D FOR THE DEDUCTION UNDER SECTION 54 OF THE ACT. HENCE, WE DI RECT THE LEARNED ASSESSING OFFICER TO GRANT THE BENEFIT OF D EDUCTION UNDER SECTION 54 OF THE ACT TO THE ASSESSEE FOR THE AMOUNT OF RS.1,50,00,000/- GROUND NO.2 : DISALLOWANCE OF THE CLAIM OF EXEMPTION UNDER SECTION 54 OF THE ACT IN RESPECT OF INVESTMEN T IN HOUSE PROPERTY OUTSIDE INDIA FOR RS.2,05,92,000/-. 8.1 THE ASSESSEE, AS SOON AS THE SALE OF HER ASSET HAS PURCHASED THE RESIDENTIAL HOUSE PROPERTY IN CALIFOR NIA, USA FOR A SUM OF RS.2,05,92,000/- AND CLAIMED DEDUCTION UNDER SECTION 54 OF THE ACT. THE ASSESSEE HAD RELIED IN T HE DECISION 11 ITA NOS. 375 & 281/MDS/2015 OF THE MUMBAI & BANGALORE BENCH OF THE TRIBUNAL IN THE CASES PREMA P.SHAH & SANJEEV SHAH VS. ITO REPORTED IN 282 AT-0211(2006)(MUM) AND VINAY MISHRA VS. ACIT REPORTED IN 20 ITR (TRIB) 129 (BANG) WHEREIN IT WA S HELD THAT BENEFIT OF DEDUCTION UNDER SECTION 54 WOULD BE AVAI LABLE EVEN IF THE INVESTMENTS ARE MADE IN HOUSE PROPERTIE S OUTSIDE INDIA. HOWEVER, THE LEARNED ASSESSING OFFICER DIS ALLOWED THE CLAIM OF DEDUCTION TO THE ASSESSEE BY RELYING I N THE DECISION OF THE AHMEDABAD BENCHES OF THE TRIBUNAL I N THE CASE LEENA J.SHAH VS. ACIT REPORTED IN (2006) 6 SO T 721, WHEREIN IT WAS HELD THAT THIS ACT WAS MADE APPLICABLE TO THE WHOLE OF INDIA. SINCE THIS ACT APPLICABLE IN INDIA, THEREFORE, THE PROVISIONS OF THE ACT ARE APPLICABLE IN INDIA A ND SAME ARE REQUIRED TO BE READ ACCORDINGLY. THUS SECTION 54F I S ALSO REQUIRED TO BE READ ACCORDINGLY, THE WORDS PURCHASE/CONSTRUCTION OF A RESIDENTIAL HOUSE ON PLA IN AND SIMPLE READING MEANS THE PURCHASE/CONSTRUCTION OF A RESIDENTIAL HOUSE MUST BE IN INDIA AND NOT OUTSIDE INDIA 8.2 ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) RELYING ON THE INTENTION OF THE LEGISLATI VE STATUTES OF 12 ITA NOS. 375 & 281/MDS/2015 THE BENEFICIAL PROVISIONS SECTION 54F AND 54 OF THE ACT AND CONSIDERING VARIOUS DECISIONS OF THE HIGHER AUTHORI TIES ON SUCH INTERPRETATIONS UPHELD THE ORDER OF THE LEARNE D ASSESSING OFFICER. 8.3 BEFORE US, THE LEARNED ASSESSING OFFICER RELIED IN THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE C ASE LEENA JUGALKISHOR SHAH VS. ACIT IN TAX APPEAL NO.483 OF 2 006 VIDE ITS ORDER DATED 14.06.2016 ON THE IDENTICAL I SSUE AND ARGUED THAT THE ASSESSEE SHOULD BE GIVEN THE BENEFI T OF SECTION 54 OF THE ACT. 8.4 WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFUL LY PERUSED THE MATERIALS ON RECORD. ON PERUSING THE P ROVISIONS OF SECTION 54 OF THE ACT WE FIND THAT THE BENEFIT O F SECTION 54 OF THE ACT WAS SPECIFICALLY DENIED FOR ANY RESIDENT IAL HOUSE PROPERTY ACQUIRED OUTSIDE INDIA BY THE FINANCE ACT, 2014 W.E.F. 01.04.2015. BEFORE THAT NO SUCH RESTRICTION EXISTED IN THE ACT. THE RELEVANT CASE BEFORE US IS FOR THE ASS ESSMENT YEAR 2010-11. IN THIS PERIOD, THE ASSESSEE HAD THE BENEFIT OF FEW TRIBUNAL DECISIONS IN HER FAVOUR ON THE ISSUE W HICH SHE RELIED WHILE CLAIMING THE BENEFIT OF SECTION 54 OF THE ACT. 13 ITA NOS. 375 & 281/MDS/2015 FURTHER, AS POINTED OUT BY THE LEARNED AUTHORIZED REPRESENTATIVE THE DECISION OF THE HONBLE GUJARAT HIGH COURT SUPRA DATED 14.06.2016 IS ALSO IN FAVOUR OF T HE ASSESSEE ON THE IDENTICAL CIRCUMSTANCES. THE GIST O F THE DECISION OF THE HONBLE GUJARAT HIGH COURT IS PLACE D BELOW FOR REFERENCE:- 9. WE HAVE HEARD LEARNED COUNSEL FOR THE PARTIES. WE HAVE PERUSED THE ORDER OF THE TRIBUNAL. THERE IS NO FINDING RECORDED BY THE AUTHORITIES BEL OW THAT THE APPELLANT-ASSESSEE HAS NOT INVESTED THE SA LE PROCEEDS IN A RESIDENTIAL HOUSE. IT IS ALSO NOT IN DISPUTE THAT THE APPELLANT HAS NOT PURCHASED THE RESIDENTIAL HOUSE IN UNITED STATES OF AMERICA. IN F ACT, SHE HAS PURCHASED A RESIDENTIAL HOUSE IN U.S.A. OUT OF THE CAPITAL GAIN ON SALE OF THE PLOT IN INDIA AN D THUS SHE HAS FULFILLED THE CONDITIONS STIPULATED IN SECT ION 54F OF THE INCOME-TAX ACT. SHE HAS INVESTED THE CAPITAL GAINS IN A RESIDENTIAL HOUSE WITHIN THE STIPULATED TIME. THERE WAS NO CONDITION IN SECTION 54F OF THE INCOME-TAX ACT AT THE RELEVANT TIME THAT THE CAPITAL GAIN A-RISING OUT OF TRANSFER OF CAPITAL AS SET SHOULD BE INVESTED IN A RESIDENTIAL HOUSE SITUATED IN INDIA. THE LANGUAGE OF SECTION 54F OF THE INCOME-TA X ACT BEFORE ITS AMENDMENT WAS THAT THE ASSESSEE SHOULD INVEST CAPITAL GAIN IN A RESIDENTIAL HOUSE. IT IS ONLY AFTER THE AMENDMENT TO SECTION 54F OF THE INCOME-TAX ACT BY THE FINANCE (NO.2) ACT, 2014, WHICH CAME INTO EFFECT WITH EFFECT FROM 1.4.2015 TH AT THE ASSESSEE SHOULD INVEST THE SALE PROCEEDS ARISIN G OUT OF SALE OF CAPITAL ASSET IN A RESIDENTIAL HOUSE SITUATED IN INDIA WITHIN THE STIPULATED PERIOD. THU S ON A PLAIN READING OF SECTION 54F OF THE INCOME-TAX AC T BEFORE ITS AMENDMENT BY THE FINANCE (NO.2) ACT LEAVES NO ROOM FOR ANY DOUBT THAT THE ASSESSEE SHOULD RESTRICT HER INVESTMENT WITHIN INDIA OR OUTS IDE INDIA. THE ONLY CONDITION WAS THAT THE ASSESSEE SHOULD INVEST IN A RESIDENTIAL HOUSE. THE TRIBUNAL HAS 14 ITA NOS. 375 & 281/MDS/2015 WRONGLY INTERPRETED SECTION 54F OF THE INCOME-TAX A CT BY HOLDING THAT THE ASSESSEE SHOULD PURCHASE THE RESIDENTIAL HOUSE SITUATED IN INDIA. PRIOR TO AMENDMENT TO SECTION 54F OF THE ACT, THE ONLY CONDITION STIPULATED WAS INVESTMENT IN A RESIDENTIA L HOUSE. WHEN THE SECTION 54F OF THE INCOME-TAX ACT WAS CLEAR AND UNAMBIGUOUS, THERE IS NO SCOPE FOR IMPORTING INTO THE STATUTE THE WORDS WHICH ARE NOT THERE. SUCH IMPORTATION WOULD BE NOT TO CONSTRUE BU T TO AMEND THE STATUTE. IF THERE IS ANY DEFECT IN THE ACT, IT CAN BE REMEDIED ONLY BY THE LEGISLATION AND NOT BY JUDICIAL INTERPRETATION. 10. IN THE PRESENT CASE THE ASSESSEE HAS PURCHASED THE RESIDENTIAL HOUSE IN U.S.A. OUT OF THE SALE PRO CEEDS OF THE PLOT IN INDIA AND THUS SHE HAS FULFILLED THE CONDITIONS OF SECTION 54F OF THE INCOME-TAX ACT BEF ORE ITS AMENDMENT BY THE FINANCE (NO.2) ACT. MOREOVER, WHEN THE LANGUAGE OF A TAXING PROVISION IS A MBIGUOUS OR CAPABLE OF MORE MEANINGS THAN ONE, THEN THE COUR T HAS TO ADOPT THE INTERPRETATION WHICH FAVOURS THE ASSESSEE. SECTION 54F OF THE ACT BEFORE ITS AMENDMENT WAS CLEAR THAT THE ASSESSEE SHOULD INVESTMENT IN A RESIDENTIAL HOUSE. THE LANGUAGE OF SECTION IS CLEAR AND UNAMBIGUOUS. THEREFORE, WE CANNOT IMPORT INTO THE STATUTE THE WORDS 'IN INDIA' AS INTERPRETED BY THE AUTHORITIES.- THUS, TAKING INTO CONSIDERATION THE ABOVE FACTS, WE ARE OF THE OPINIO N THAT BENEFIT OF SECTION 54F BEFORE ITS AMENDMENT CA N BE EXTENDED TO A RESIDENTIAL HOUSE PURCHASED OUTSID E INDIA. IN THAT VIEW OF THE MATTER, THE APPEAL IS ALLOWED. THE ORDER OF THE TRIBUNAL IS SET ASIDE. WE ANSWER T HE QUESTION IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 8.5 FOLLOWING THE DECISION OF THE HONBLE GUJARAT H IGH COURT, WE DO NOT FIND ANY HESITATION TO HOLD THE IS SUE IN FAVOUR OF THE ASSESSEE WHO HAD INVESTED THE SALE PR OCEEDS 15 ITA NOS. 375 & 281/MDS/2015 OF HER ASSET IN A RESIDENTIAL HOUSE PROPERTY IN CALIFORNIA(USA). THEREFORE, WE HEREBY DIRECT THE LE ARNED ASSESSING OFFICER TO GRANT THE BENEFIT OF SECTION 5 4 OF THE ACT TO THE ASSESSEE WITH RESPECT TO PURCHASE OF HER FLA T FOR RS.2,05,92,000/- ON 22.07.2010 WHICH IS WELL WITHIN THE PERIOD OF TWO YEARS FROM THE DATE OF SALE OF HER OR IGINAL ASSET. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED AND THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 2 ND NOVEMBER, 2016 SD/- SD/- ( . . . ) ( . ) (N.R.S.GANESAN) ( A.M OHAN ALANKAMONY ) ! # / JUDICIAL MEMBER # / ACCOUNTANT MEMBER ! /CHENNAI, ' /DATED 2 ND NOVEMBER, 2016 SOMU )* +* /COPY TO: 1. APPELLANT 2. RESPONDENT 3. , () /CIT(A) 4. , /CIT 5. * 0 /DR 6. /GF