TMI Blog2019 (1) TMI 209X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by CIT(A). Argument of the assessee that on the date of execution of GPA dated 29/05/2002, the transfer has taken place in the light of section 2(47)(vi) we find that the assessee’s case does not come under the purview of section 2(47)(vi), and therefore, it cannot be said that the assessee along with Smt. Adhikari Syamala has transferred the property on 29/05/2002 on the date of execution of GPA. In the case of C. Sugumaran [2014 (11) TMI 320 - MADRAS HIGH COURT] has considered the provisions of section 2(47)(vi) and held that, to attract the above section, two conditions must be fulfilled, assessee must have received consideration and possession should be given. If the above two conditions are not fulfilled, it cannot be said that there is a transfer of property as per section 2(47)(vi) of the Act. In the present case, the assessee neither received any consideration nor possession is handed over to the GPA holder, therefore, section 2(47)(vi) has no application.- Decided against assessee - ITA Nos. 396 And 397/VIZ/2015 - - - Dated:- 28-12-2018 - SHRI V. DURGA RAO, JUDICIAL MEMBER For The Assessee : Shri G.V.No. Hari Advocate For The Department : Shri P.S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the understanding arrived at with Sri Ashok Kumar Jain, the loan account was closed on that day itself and the possession and the possession of the property was also given GPA holder. According to the GPA holder, the sale was completed on the date of which GPA was executed. Subsequently, the GPA holder sold the property to Sri Gadde Srihari Babu on 20/11/2006 and that transaction is no way concern with the assessee and therefore no capital gains arose out of the sale transaction dated 20/11/2006. The Assessing Officer by considering the GPA dated 29/05/2002 and also the submissions made by the assessee, he has noted that as per the GPA executed along with Smt. Adhikari Syamala dated 29/05/2002 in favour of Sri Govindram Purohit for the purpose of managing the affairs of the property on their behalf including the sale of property. The GPA executed by the assessee is not sale-cum-GPA. Moreover, the assessee has not received any consideration on the date of execution of GPA from Sri Govindram Purohit and no possession is given. Therefore, the transaction cannot be considered as transfer under section 53A of the Transfer of Property Act, 1882. He further observed that GPA holder execut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue to his constant efforts, the debtors have executed a GPA on 29/05/2002 in favour of his Accountant-Sri Govindram Purohit to secure the repayment of loan. At the time of execution of GPA, Sri Govindram Purohit has neither paid nor received any consideration from the debtors. The above two debtors have executed GPA in favour of his Accountant Sri Govindram Purohit to secure the repayment of loan, but they have not transferred the physical possession of the property to him. Subsequently, in the year 2006 the debtors have sold the property to Sri Gadde Srihari Babu for a consideration of ₹ 7,50,200/-, out of which they have repaid the amount lent by him of ₹ 5.00 lakhs and interest accumulated thereon of ₹ 1.50 lakhs, totalling to ₹ 6.50 lakhs and the balance consideration was retained by them. As a GPA holder on behalf of the above two debtors, Sri Govindram Purohit executed the sale deed, but Sri Govindram Purohit has not received any consideration out of this transaction. It has also been submitted by Sri Ashok Kumar Jain that they have not received any lease income from the land nor paid any taxes on the said land. The Assessing Officer after considering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ney due to him. i.e. in settlement of loan taken from Mr. Ashok Kumar Jain. Since, beneficial interest in the property was transferred by the co-owners in favour of Sri Govindaram Purohit in the F.Y. 2002-03 by way of executing CPA in his favour on 29-05-2002, as per provisions of section 2(47)(V) r.w.s. 53A of the Transfer of Property Act, 1882, transfer had taken place in A.Y.2003-04 and not in A.Y.2007-08. According to appellant, she relinquished all the rights over the property in the year 2002. 6.2 If a Power of Attorney is given to a person to do generally various Acts and to represent the Principal in a wide variety of transactions, then the same is said to be 'General Power of Attorney (GPA) . Normally, Power of Attorneys pertaining to immovable properties, which are given after receipt of considerations are irrevocable ones. In appellant's case, there is no mention of receipt of consideration (by herself and co-owner) in the CPA given to Mr. Govindaram Purohit. There is no mention in CPA about appellant's loan liability to Mr. Ashok Kumar Jain and the transfer of land is towards repayment of the loan and interest as on the date of execution of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 14-062006 there is mention about acknowledgement of receipt of 1) ₹ 50,000/- as advance and 2) the amount that were due to Ashok Kumar Jain i.e. 5 lakh along with interest of ₹ 1.50 Lakh totalling to ₹ 6.5 Lakh. On the 5th page it was mentioned that balance of ₹ 50,200/- is due and it can be paid and the document be registered as per convenience. 6.5 On the other hand, registered document dated-20-11-2006 executed by GPA holder of appellant and co-owner contained details of sale consideration of ₹ 7,50,200/-. There is a mention in the document dated 20-11-2006 (page No.2 3) that vide agreement No.624-1-2475/2006 dated 14-06-2006 the vendee, Sri Gadde Srihari Babu, Vijayewada had paid ₹ 50,000/- cash and ₹ 6,50,000/- vide registered document on 14-06-2006 to Shri Ashok Kumar Jam, since the vendors (appellant and co-owner) are due of the same amount to Sri Ashok Kumar Jain. Remaining ₹ 50,200/- was paid on 20/11/2006. 6.6 Sale of immovable property is a transfer of ownership in exchange for a price paid or promised or part paid and part promised as per section.54 of the Transfer of Property Act, 1882. Even Section 53A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings, appellant denied her capital gains liability claiming that transfer took place in the year 2002 and provisions of section 50C were not applicable then as they came into effect w.e.f. 01.4.2003. Despite several opportunities given during assessment stage and subsequent to that also, appellant and co-owner neither changed their stand nor made a request for invoking provisions of 500(2) for referring the capital asset for Valuation Officer. Under such circumstances, I am of the view that action of Assessing Officer in computing long term capital gain chargeable to tax on sale of land (Capital Asset) in the hands of appellant and co-owner in the relevant assessment year (2007-08) is in order. 6.7 In the case of ACIT Vs Upper India Paper Mills Co. Pvt. Ltd. (ITAT Lucknow) observed thus S.2(47)(V) - Even if possession is handed over to the developer, there is no transfer if the developer has only paid an interest free advance to the Assessee to meet expenses . The Provisions of S.2(47)(V) of the Act can only be invoked where absolute possession of capital asset was given to the buyer against certain consideration, but in the instant case no considerati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t possession. Even as on 14th June, 2006 i.e., at the time of sale agreement, the appellant and co-owner are the real owners of the property in the eyes of law since the CPA is only authorizing the GPA holder to sell the property on behalf of the real owners (appellant and co-owner). 5) Hence only with signing of CPA without receiving any consideration / part consideration as on 29.05.2002, there was no transfer of property, as per provisions of Section 53A of the Transfer of Property Act. 6) Hence, real sale of property (capital asset) took place in the year 2006. In view of the above, the order of Assessing Officer is confirmed. 6. On being aggrieved, assessee carried the matter in appeal before the Tribunal. 7. Ld. counsel for the assessee has submitted that the assessee has executed GPA on 29/05/2002 in favour of Sri Govindram Purohit and all the rights over the property were given to him, therefore, the transfer has taken place on 29/05/2002 and the capital gains arouse only in the Assessment Year 2003-04. It is further submitted that the assessee while executing the GPA, she has discharged all her liabilities of ₹ 6,50,000/- payable to Sri Ash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent Year 2007-08. The case of the Assessing Officer is that the assessee has executed GPA on 29/05/2002, no possession is given to the GPA holder, no consideration is received, no interest has been transferred to GPA holder, only GPA is executed to manage the affairs of the property including sale on behalf of the assessee. Therefore, by virtue of executing the GPA dated 29/05/2002, no transfer has taken place, but only transfer has taken place by executing the sale deed by GPA holder on 20/11/2006 by receiving a final sale consideration. The ld. CIT(A) has considered both the versions of the assessee as well as Assessing Officer and came to a conclusion that the transfer of the scheduled property taken place on 20/11/2006 by executing the sale deed in favour of Sri Gadde Srihari Babu by receiving balance sale consideration. The ld. CIT(A) has given the following reasons for the above conclusion that the GPA dated 29/05/2002 only authorisation for the sale property, taking loan on the property, to sign those authorisation documents, therefore, it did not amounts to sale, it is not sale-cum-GPA. In any sale (transfer of immovable property) seller, buyer and sale consideration should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2, which is the date of execution of GPA, transfer has taken place, possession is given is not correct. On 14/06/2006, the date on which the amount of ₹ 6,50,000/- received by GPA holder by executing sale agreement and the same is paid to Sri Ashok Kumar Jain and on 20/11/2006 sale deed is executed by receiving ₹ 50,200/- on behalf of the assessee as well as co-owner Smt.Adhikari Syamala and came to a conclusion that capital gains has to be taxed in Assessment Year 2007-08 as transfer taken place on 20/11/2006. We find that the assessee executed GPA on 29/05/2002 and in the GPA there is no sale consideration and not handed over the possession, it is only general GPA, therefore it cannot be said that on the date of execution of GPA, the assessee has transferred the property. Therefore, the Assessing Officer has rightly held that the property is transferred only on 20/11/2006 on the date of registration of sale deed by GPA holder on behalf of the assessee. The ld. CIT(A) has considered the GPA and remand report and gave a categorical finding that the transfer of the property is taken place only on 20/11/2006 and upheld the order of the Assessing Officer. Therefore, it can ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
