Case Law Details
Shri S.S. Manthirikumar Vs ITO (ITAT Chennai)
Conclusion: Mere execution of power of attorney could not be considered to be transfer of property. For transfer of property, assessee had to enter into an agreement for sale either by himself or through power of attorney agent and also hand over the physical possession of the property as contemplated under Section 53A of Transfer of Property Act.
Held: AO made an addition in respect of long-term capital gains arising from transaction of property based on a presumption that the property was sold on the date on which the power of attorney was executed. Assessee claimed that the possession of the property was handed over to the power of attorney agent for negotiating the sale and it was not handed over to the purchaser. It was contended that no consideration was received from power of attorney agent also, therefore, there was no sale during the year under consideration. It was held mere execution of power of attorney could not be considered to be transfer of property. For transfer of property, assessee had to enter into an agreement for sale either by himself or through power of attorney agent and also hand over the physical possession of the property as contemplated under Section 53A of Transfer of Property Act. Moreover, in case there was agreement between assessee and purchaser, by which the purchaser was allowed to continue to enjoy the property, then also there might be transfer within the meaning of 2(14). It was not the case of Revenue that assessees entered into an agreement for sale or arrangement allowing the purchaser to continue to enjoy the property. The execution of sale deed and handing over possession pursuant to sale deed would be the date of sale. Therefore, AO should verify the sale deed and find out when actually the possession of the property was handed over
FULL TEXT OF THE ITAT JUDGMENT
Both the appeals of the two independent assessees are directed against the respective orders of the Commissioner of Income Tax (Appeals), Puducherry, for the assessment year 2008- 09. Since common issues arise for consideration in these appeals, we heard both the appeals together and disposing the same by this common order.
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