Capital Gain Exemption can be allowed to House Property acquired in Foreign Countries: ITAT [Read Order]

The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) held that the assessee is entitled for capital gain exemption under section 54F of the Income Tax Act in respect of the properties acquired outside India.

In the instant case, the Revenue approached the Tribunal contending that for granting benefit of section 54/ 54F of the Income Tax Act, the residential house purchased/constructed must be in India and not outside India.

The Tribunal cited a few decisions of ITAT wherein it was held that the words “in India” cannot be inserted in section 54F of the Act and as per plain of section 54F of the Act, the sale proceeds of capital asset shall be invested in residential house or outside India.

While upholding the findings of the first appellate authority, the Tribunal bench found that the assessment year in this appeal is 2014-15 and the provision in section 54F comes w.e.f. 01.04.2015 according to which it was clarified that the residential house is to be acquired only in India meaning thereby before this amendment it was not clear as to whether the benefit of section 54F can be given to residential house acquired in India or abroad.

“This issue was examined by the Tribunal in the case of ACIT Vs. Iqbal Jafar which was authored by one of the members of this Bench and it was held by the Tribunal that before the amendments, the benefit can also be given to the residential house acquired in abroad,” the bench said.