Capital gains taxation follows real ownership, not mere agency, so a power of attorney holder is not the taxable owner.

Long-term capital gains from the sale of immovable property are assessable in the hands of the owners, not a mere power of attorney holder. Where the registered sale deed and power of attorney show that the assessee had no right, title, or beneficial interest in the property and acted only as an agent to execute the transfer, the attorney holder cannot be treated as the owner for tax purposes. The transferor's capital gains remain taxable in the hands of the persons who owned the property and received the consideration, and taxing the attorney holder would assess income in the wrong person's hands.

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Issues: Whether long-term capital gain arising from sale of immovable property could be assessed in the hands of a power of attorney holder who had executed the sale deed on behalf of the actual owners.

Analysis: The property was found to belong to two co-owners, and the assessee had acted only as their power of attorney holder for facilitating the sale. The registered sale deed and the power of attorney established that the assessee had no right, title, or interest in the property as owner. A power of attorney is only an instrument of agency and does not itself transfer ownership or vest the transferor's capital gains in the attorney holder. The income arising from the transfer had therefore to be assessed in the hands of the real owners, i.e. the persons who owned the property and received the consideration. Taxing the assessee, who merely carried out the transaction on behalf of the owners, would amount to assessing the income in the hands of the wrong person.

Conclusion: The addition of long-term capital gain in the hands of the assessee was unsustainable and was deleted.

Ratio Decidendi: Capital gains must be assessed in the hands of the person who ically owns and transfers the property, and a mere power of attorney holder cannot be taxed as the owner absent any vested proprietary interest.

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