General power of attorney did not trigger transfer for capital gains; registered sale deed fixed the taxable year.

Execution of a general power of attorney, without consideration and without handing over possession, did not amount to a transfer for capital gains purposes under section 2(47)(v) or section 2(47)(vi) read with section 53A of the Transfer of Property Act, 1882. A GPA that merely authorised management and sale of the property was not treated as a sale-cum-power-of-attorney arrangement. The transfer was therefore linked to the registered sale deed executed later, when the sale was completed and the balance consideration was received. Capital gains were accordingly chargeable in the year corresponding to the registered sale deed.

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Issues: Whether execution of a general power of attorney on 29-05-2002 amounted to a transfer of the property for capital gains purposes, or whether the transfer took place only on execution of the registered sale deed on 20-11-2006, and whether section 2(47)(vi) of the Income-tax Act, 1961 applied.

Analysis: The assessee executed only a general power of attorney in favour of the holder, without receiving any sale consideration and without handing over possession. The power of attorney merely authorised the holder to manage and sell the property and did not constitute a sale-cum-power-of-attorney arrangement. The essential ingredients for transfer under section 2(47)(v) or section 2(47)(vi), read with section 53A of the Transfer of Property Act, 1882, were not satisfied because there was no consideration and no transfer of possession in 2002. The sale agreement and the registered sale deed in 2006 showed that the property was actually sold only when the sale deed was executed and the balance consideration was received.

Conclusion: The transfer was held to have taken place on 20-11-2006 and not on 29-05-2002. Capital gains were therefore chargeable in Assessment Year 2007-08, and the assessee's challenge failed.

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