Deduction u/s 54F not deniable on ground of pre-owning of residential house in foreign

Smt. Maries Joseph Vs DCIT (ITAT Cochin)

ITAT Cochin held that as per condition mentioned in section 54F deduction is not available if the assessee owns more than one residential house, other than the new asset. The same should be interpreted to mean ownership of residential houses in India. Accordingly, deduction u/s. 54F not deniable if assessee owns two residential houses in USA

Facts- The assessee is a Non-Resident, filed ROI for the AY 2015-16 on 24-8-2016 admitting a total income of Rs.54, 18,340/ and claiming exemption u/s. 54F of the Income Tax Act in relation to the investment made in ‘Skyline Infinity’ apartment, Thrissur.

The assessee initially claimed Rs 86,24,063/- being investment in residential house property at “Skyline Infinity’, Thrissur and Rs 54,18,377 has been admitted as taxable Long Term Capital Gains.

In the course of assessment proceedings, AO issued notice stating that the assessee is not eligible to claim exemption u/s. 54F of the Act as according to the AO, the assessee has acquired a residential house (apartment in Sobha City), other than the New Asset and therefore the conditions u/s. 54F is not satisfied and accordingly it was proposed to disallow the entire claim u/s. 54F.

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