Case Law Details
Principal CIT Vs. Dipankar Mohan Ghosh (Delhi High Court)
The issue under consideration is whether the exemption u/s 54 will be allowed if the reinvestment is made in residential property outside India?
High Court states that, the Circular No. 01/2015 containing explanatory notes to the provisions of the Finance (No. 2) Act, 2014 whereby Section 54 of the Act was amended to specifically include the word “in India” in respect of the residential house acquired out of the long term capital gain earned by the assessee. The said explanatory note in terms provides that the said amendment would take effect from 01.04.2015 and would, accordingly, apply for the assessment year 2015-16 and subsequent assessment years. Thus, the said amendment is prospective and would not apply in the facts of the present case since the respondent sold the residential property in India and earned long term capital gain in the assessment year 2012-13 and invested the said gain in the same year for purchase of the property, as aforesaid, in London. Therefore, the applicant would be eligible for the benefit available under the provisions of Section 54 of the Income-Tax Act and to the extent of re-investment in residential property outside India.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
1. The challenge in the present writ petition preferred by the Revenue is to the order dated 22.12.2017 passed by the Authority for Advance Rulings in AAR No. 1356/2012. The said authority has held that the respondent/ applicant would be eligible for the benefit available under the provisions of Section 54 of the Income-Tax Act and to the extent of re-investment in residential property outside India, i.e. in London in this particular case.
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