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TMI Blog2012 (11) TMI 850X X X X Extracts X X X X X X X X Extracts X X X X ..... hands of the assessee ? 2. Since the issues raised in all these appeals are common and the Tribunal had also considered the issues in respect of Assessment Years under a common order we feel, it is better that the entire case is dealt with under a common order. 3. The assessees are individuals. One P.Srinivasan, the respondent in T.C.A.No. 635 of 2005 purchased a piece of land measuring about 46 cents at Mogappair village for a sale consideration of Rs.92,000/- under Registered Sale deed and T.R.Harikrishnan, the respondent assessee in T.C.A.No.636 and 637 of 2005 purchased the land to an extent of 43.50 cents in Mogappair village for a sale consideration of Rs.87,000/- under a registered sale deed. Incidentally, it is pointed out that P.Srinivasan, the respondent in T.C.No.635 of 2005 is the Managing Director of the Emerald Promoter Pvt. Ltd. It is seen from the facts herein that the assessees agreed to sell the property for a sale consideration of Rs.4,50,000 in the case of P.Srinivasan and Rs. 4,00,000 in the case of Mr.T.R.Harikrishnan in favour of Emerald Promoter Pvt. Ltd. Accordingly, after receiving the entire sale consideration an agreement dated 23.10.1991 and a genera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance, the receipt whereof, the vendors 1 to 5 do hereby admit and acknowledge; i) Rs. 10.00 lakhs paid by Cheque No.962122 dated 7.10.94 drawn on Bank of Madura payable at Madras. ii) Rs. 10 lakhs paid by Cheque No. 086851 dated 27.10.1994 drawn on Bharat Overseas Bank payable at Madras. b) Rs.17,00,000 (Rupees Seventeen Lakhs only) paid to the vendors 1 to 5 through the Confirming Party, by the Purchaser within two months from the date of receipt of No Objection Certificate from the appropriate authority, Income Tax Department or within six months from this date whichever is later. c) The balance sum of Rs.53,00,000/- (Rupees Fifty Three Lakhs only) will be paid by the Purchaser to the Vendors 1 to 5 through the confirming party in three equal instalments to be paid on or before the end of 9th, 12th and 15th month from this date. 5. The agreement pointed out that the confirming party viz., M/s. Emerald Promoters Pvt. Ltd. are entitled to market the existing incomplete constructions, after completion together with 16.04 % undivided share in the Schedule A lands to third parties for such considerations that the confirming party would fix to its own account. and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are out of the 83.96% undivided share in the lands described in Schedule C. However, the said sale deed referred to the agreement dated 27.10.1994 entered into with Sudsun Housing (I) Ltd. Thus going by the said agreement, the Assessing Authority held that the assessees were to be assessed on the capital gains arising under the consideration for the sale of the asseessees' interest of 83.96% of undivided share in the property. Aggrieved by the said assessment, the assessees went on appeal before the Commissioner of Income Tax (Appeals) who held that the assessees had allowed M/s.Emerald Promoters Pvt. Ltd. to build flat in 16.04% of each undivided share of interest for which they had received Rs.4.5/- lakhs and Rs.4 lakhs respectively, on 13.11.92 and the balance land of 83.96% has been transferred as part performance of agreement dated 27.10.1994 to Sudsun Housing (I) Ltd. for a consideration of Rs. 18,30,370/- and hence the consideration received in respect of this transfer is liable to be assessed to tax. Thus, the Commissioner of Income Tax (Appeals) dismissed the appeals. Aggrieved by the said order, the Revenue went on appeal before the Income Tax Appellate Tribunal. 8. On a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal further referring to the confirmation letter written by the M/s.Emerald Promoter Pvt. Ltd. pointed out that the entire sale consideration was received by them from M/s. Sudsun Housing Development (I) Ltd.. In the facts of the admitted case, the Tribunal agreed with the assessee and thereby allowed the appeal holding that no capital gain arose in the hands of the assessees. Aggrieved by the said order, the present appeals have been filed by the Revenue before this court. 10. As far as the decision of this court reported in 251 ITR 532 (D.KASTURI VS. COMMISSIONER OF INCOME TAX AND ANOTHER) is concerned the same was confirmed by the Division Bench of this court in the decision reported in (2010) 323 ITR 40 (D.KASTURI VS. COMMISSIONER OF INCOME TAX AND ANOTHER) wherein this court held that for application of Section 53A of the Transfer of Property Act, the relevant consideration would be the clauses in the agreement between the parties to the agreement and their performance in terms of the agreement. The subsequent act of the assessee in executing the power of attorney and the sale deeds executed by the power holder on the basis of such power of attorney would not in any way ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdly any reference at all to the agreement dated 23.10.1991. Further, the possession given in the power of attorney never contemplated any transfer of interest in favour of M/s.Emerald Promoters Pvt. Ltd. Learned Standing Counsel also submitted that the tripartite agreement dated 27.10.1994 entered into between the assessee herein through the Power of Attorney M/s.Emerald Promoters Pvt Ltd. with M/s. Sudsun Housing Development (I)Ltd. as a purchaser includes Emerald Promoters P) Ltd. as a confirming party for the purpose of giving sale of undivided share of 83.96 %. Going by the conduct of the assessee, it is clear that the document of the year October 1991 is only a created one and no reliance can be placed on this. Consequently, the receipt produced by assessees, evidencing the payment of sale consideration also could not be accepted in the background of the facts available through the documents. The Tribunal had committed a serious error in holding that the assessee could not be mulcted with any liability on account of sale in favour of M/s.Sudsun Housing Development (I) Ltd. 13. Countering the said submission and supporting the order of the Tribunal learned counsel for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r agreeing with the Revenue as regards the sale effected by the assessee. As already pointed out on 5.11.1991 the assessee executed a power of attorney in favour of M/s.Emerald Promoters P Ltd. A reading of the said document would show that there was no reference therein about the so called sale agreement dated 23.10.1991. Thus, reading the power of attorney, we do not find any justification to accept the claim of the assessee that he had entered into an agreement with M/s.Emerald Promoters Pvt. Ltd. for sale of the entire land in pursuance of which the possession was handed over to the said M/s.Emerald Promoters Pvt. Ltd. . 16. Clauses 1 to 5 of the power of attorney contemplated that M/s.Emerald Promoters Pvt. Ltd. shall act to sell the property in part or full and issue receipts . The said clauses read as follows:- 1) to sell the property in part or full, or sub-divide or undivide share and to receive consideration on my behalf and issue receipts. 2) to enter into contracts for sale, lease, mortgage and to receive the consideration. 3) to execute all documents, deeds, papers in regard to sale, lease and mortgage of the Schedule Property and present before the Registration Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . As already pointed out, the agreement speaks about the mode of payment. Based on the said agreement, possession was handed over to Sudsun Housing Development (I) Limited. A scrutiny of all these documents enables us to come to the conclusion that Emerald Promoters Pvt. Ltd. as a power agent of the vendors, the assessees herein and others had acted on the said agreement to sell an undivided share of an extent of 83.96% in favour of Sudsun Housing (I) Limited for a consideration of Rs. 90/- lakhs. It is no doubt true that the said consideration was to be shared by more than one vendor. However, there are hardly any materials available before this court as to when the assessees along with the other vendors had executed the sale deed in favour of the vendors 6,7,8 for which there is no reference in the agreement dated 27.10.1994. 19. Quite apart, the assessment order passed in the case of P.Srinivasan would show that a sale deed was executed on 30.10.1994 by the assessee P.Srnivasan and four others in favour of one Mary Bala Gowri D Almeida in respect of a plot in an extent of 546 sq. ft out of 83.96% undivided share transferred to Sudsun Housing (I) Ltd. and the sale deed refers to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per the deed dated 2.9.1991, then the deed of power of attorney must carry some reference to the first of the agreements to accept the contention of the assessees that they had divested their rights over the property in favour of the power of attorney holder and that they had handed over the property in part performance of the agreement and hence the sale consideration could not be assesseed to capital gains at the hands of the respective assessees. 22. Going by the above facts, we have no hesitation in accepting the plea of the Revenue that the one and only agreement on which the assessee had divested its interest to atleast to the extent of 83.96% in favour of M/s.Sundsun Housing Development (I) Ltd. for which consideration of Rs.90 lakhs/- was fixed is the agreement dated 29.10.1994 and that Emerald Promoters Private Limited acted only as a power of attorney holder on behalf of the vendors. 23. As regards the reliance placed on the letter addressed to the Commissioner of Income Tax (Appeals), that the sale consideration of Rs.90/- lakhs was retained by Emerald Promoters Pvt. Ltd. except treating as statement that the consideration received was never passed on to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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