Case Law Details
Shri Tirumalasetti Srinivasa Rao Vs. DCIT (ITAT Visakhapatnam)
The issue under consideration is whether the transaction of transferring the possession of property to the builder by entering into sale agreement coupled with power of attorney will give rise to Capital Gain?
In the present case, the assessee argued that he has not sold the property, it was only the sale agreement, hence, the case does not cover for the purpose of capital gains. Further he argued that the assessee has given the property for development to Vanadurga Constructions and the assessee has neither received consideration in cash nor in kind. Therefore, argued that there is no case for assessment of capital gains, hence, requested to delete the addition made by the AO. The Ld.DR argued that the assessee has entered into development agreement, agreement of sale coupled with power of attorney, hence, it is to be treated as complete sale, accordingly argued that the AO rightly assessed the capital gains and no interference is called for.
ITAT states that, the sale agreement placed before us by the assessee in page No.10-21 of the paper book. The assessee had entered into agreement to sale coupled with power of attorney for a sum of Rs.57,33,000/- on 12.03.2007. As per the recitals of the agreement, the assessee has given complete possession to the builder along with original sale deed or copies thereof and other papers relating to title. Further, once the assessee had entered into agreement of sale coupled with power of attorney and handed over the possession of the property to the vendee, the transfer is complete as provided u/s 47 of the Act. This view is supported by the decision of Hon’ble Jurisdictional High Court decision in the case of Potla Nageswara Rao. Therefore, ITAT hold that the sale of property attracts capital gains tax and the AO rightly brought the sale of property under the capital gains and ITAT do not find any infirmity in the order of the CIT(A) and the same is upheld. In the result, appeal of the assessee is dismissed.
FULL TEXT OF THE ITAT JUDGEMENT
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