TMI Blog2014 (11) TMI 320X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee in any manner and therefore, sub-clause (vi) of Section 2(47) of the Income Tax Act does not get attracted - Clause 21 of the power of attorney clearly reveals that no consideration was received from the power agent for appointing him as power of attorney - It also emphasised that the property right has not been handed over to the power agent - the plea of the Revenue cannot be accepted that there was an element of transfer or enabling enjoyment in favour of the assessee - The letter of the land owner subsequently issued does not come to the aid of the Department - It is the duty of the power of attorney holder to deliver the amount received for the purpose of transfer of property - no fault could be found on the part of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings within its ambit of the transfer, enjoyment of the property right through power of attorney agreements? 2. The assessment in this case relates to the assessment year 2009-10. The assessee is an individual. He is a power agent of one Mr.M.Viswanathan, who is the actual owner and vendor of the property. The said Viswanathan entered into a registered power of attorney on 01.09.2006 in favour of the assessee without any consideration. For deciding this case, the relevant clauses in the power of attorney agreement, as extracted by the Tribunal, reads as follows: 01) to negotiate the sale of the schedule mentioned property in whole or undivided shares. 02) to execute any agreement/s for sale or other document/s necessary to effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o all things necessary and essential for proper management of our property including disposal and completion of sale of the schedule property. And generally to do the such act are necessary and incidental in this regard. No consideration is received from power agent for giving this power of Attorney. The power agent shall maintain proper accounts and render the same. The property right has not been handed over the Power Agent. 3. After the execution of power of attorney, the property was registered in the name of the assessee's wife Dr.Meera Bai for a sum of ₹ 25.00 lakhs by a sale deed dated 23.10.2008. The Assessing Officer took the view that it is the assessee who sold the plot to his wife Dr.Meera Bai for a sum of ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hs at the time of executing the power of attorney, which is a subsequent statement by the said owner did not inspire the confidence of the Tribunal to accept the Department's plea. The Tribunal laid emphasis on the registered document, namely, Power of Attorney, in letter and spirit holding that there was no consideration paid at the time of executing the power of attorney. The Tribunal also gave a finding that there was no supporting evidence except the letter of the said owner to disbelieve the claim of the assessee. One other factor that the Tribunal relied upon was that the owner had earlier executed a power of attorney and revoked the same, meaning thereby, that it was a transaction entered into by the land owner to his own benefit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 987, to submit that the arrangements by way of power of attorney would also come within the purview of Section 2(47) of the Income Tax Act. The relevant portion of the circular reads as follows: 11.1 The existing definition of the word transfer in s.2(47) does not include transfer of certain rights accuring to a purchaser, by way of becoming a member of or acquiring shares in a co-operative society, company, or association of persons or by way of any agreement or any arrangement whereby such person acquires any right in any building which is either being constructed or which is to be constructed. Transactions of the nature referred to above are not required to be registered under the Registration Act, 1908. Such arrangements confer th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Section 2(47) of the Income Tax Act does not get attracted. Clause 21 of the power of attorney, which has been already referred to supra, clearly reveals that no consideration was received from the power agent for appointing him as power of attorney. It also emphasised therein that the property right has not been handed over to the power agent. We are, therefore, unable to accept the plea of the Revenue that there was an element of transfer or enabling enjoyment in favour of the assessee. The letter of the land owner subsequently issued does not come to the aid of the Department. It is the duty of the power of attorney holder to deliver the amount received for the purpose of transfer of property. Therefore, no fault could be found on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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