ITO Vs Pamela Pritam Ghosh (ITAT Mumbai)
Income Tax Appellate Tribunal (ITAT) Mumbai dismissed the Revenue’s appeal against Pamela Pritam Ghosh regarding capital gains tax exemptions under Section 54 of the Income Tax Act for Assessment Year 2011-12. The dispute centered on three key issues: (1) whether exemption under Section 54 could be claimed for a house purchased abroad, (2) whether exemption under Section 54F was valid without depositing unutilized capital gains in a Capital Gains Bank Account, and (3) the appropriate indexation year for computing capital gains. The Tribunal upheld the Commissioner of Income Tax (Appeals) [CIT(A)]’s ruling, citing a Gujarat High Court decision in Leena Jugalkishore Shah’s case, which permitted exemptions for overseas property purchases before the 2014 amendment restricting benefits to properties within India. On the second issue, ITAT referred to previous High Court rulings and held that since Ghosh had utilized the capital gains within the prescribed time, non-deposit in a designated account did not invalidate the exemption. Lastly, aligning with the Bombay High Court’s ruling in Manjula J. Shah’s case, ITAT ruled that indexation should begin from the previous owner’s acquisition date, not the inheritance date. With these findings, ITAT dismissed the Revenue’s appeal, allowing the taxpayer’s claims.
