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2019 (5) TMI 1499 - AT - Income TaxCapital gain computation - transfer of agriculture land by the assessee through an irrevocable general power of attorney - Transfer u/s 2(47) - As per the assessee, the transfer of the land through the POA is a valid transfer - AO considered the sale deed as a transfer instrument which was executed on 19-04-2012. Thus the AO invoked the provision of section 50C and accordingly took the sale value as the valuation made by the valuation authority to compute the STCG - HELD THAT:- As relying on SURAJ LAMP & INDUSTRIES PVT. LTD. VERSUS STATE OF HARYANA & ANOTHER [2011 (10) TMI 8 - SUPREME COURT] there remains no doubt that the transfer of property based on the POA is not a valid transfer. Any agreement or arrangement enabling the transfer or enjoyment of the property will be treated as a transfer to compute the capital gain. Thus from the above provision, it appears that power of attorney shall also be treated as a transfer for working out the capital gain tax. Respectfully following the judgment of the Hon’ble Supreme Court in the case of Suraj Lamp Industries Pvt. Ltd. (Supra), we hold that there was no transfer of the land upon the execution of power of attorney in favor of the party. Thus the transaction for the transfer of property has not been affected in the assessment years 2010-11 and 2012-13 as claimed by the assessee upon the execution of power of attorney. Accordingly, we decide the issue against the assessee. There was no transfer of the impugned property in the year under consideration as alleged by the AO. It is because the sale deed was registered as admitted by the AO on 19 April 2012 i.e. financial year 2012-13 corresponding to assessment year 2013- 14. Hence there cannot be any addition to the total income of the assessee on account of capital gain for the year under consideration. The provision of section 45 of the Act requires to tax the income in the year of transfer of the property. Capital gain income on the sale of the land cannot be taxed in the year under consideration. Accordingly, we reverse the order of the ld. CIT-A and direct the AO to delete the addition made him. Hence the ground of appeal of the Revenue is partly allowed.
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