Capital Gain

[SANDEEP GUPTA]

I seek your opinion on the following issue,
Mr. A execute & registered an agreement to sell in 2011 for buying a
plot from Mr. B, which was proposed to be allotted against his
acquisition of agricultural land by NOIDA. Simultaneously Mr. B also
given and registered GPA to Mr. C, who is Son of Mr. A, on same Day.
In Feb.2015 Noida issued an allotment letter with an instruction to
deposit development charges, in fevour of Mr. B for a plot . Mr. B
deposited the requisite amount with NOIDA and NOIDA execute a lease
deed in fevour of Mr. B in April2015. Possession certificate of the
plot was granted in Aug.2015.
In Aug.2015 Mr. A submit withdraw his agreement to sell, registered
in 2011 and has granted no objection and allow to GPA to sell plot to
anyone through an affidavit.
Later In the month Aug 2015 the plot is transferred to new buyer
through transfer deed. In transfer deed GPA appeared as transferor and
given his own PAN.
Sale proceeds of the plot is received in the name of Mr. A (Father of
GPA holder).
1% TDS has been deducted by Buyer of Mr. A .
Now queries are as under,
1) Who is the transferor of the asset.
2) What is holding period of the assets.
3) Who is liable to pay tax on capital Gain.
4) Is Capital gain could be treated as LTCG in any way.
5) Is PAN quoted by GPA is correct, if no how it can be rectified.
6) If Mr. A is not transferor, how to treat the amount received in the hand of Mr. A from Buyer.

Please guide me as earliest possible.

[Ganeshan Kalyani]

Sir, may I request you to clarify what is GPA, is it General Power of Attorney ??. And which property you are referring in sentence, ''Later In the month Aug 2015 the plot is transferred to new buyer'' ,. Please elaborate in lucid manner. Thanks.

[KASTURI SETHI]

Sh.Ganeshan Kalyani Ji,

Are you also expert in property matters ?

[Ganeshan Kalyani]

Sir, the query is of Capital Gain under Income Tax, so I am trying to understand.

No Sir I am not expert in property matters. Thanks.

AI Summary

Capital gain tax liability depends on transferor identity where a power of attorney executed the sale. Facts: a 2011 agreement to sell and a contemporaneous registered General Power of Attorney were followed by a 2015 allotment, lease and possession in favour of the original seller; the GPA holder executed a transfer deed to a new buyer using his PAN while sale proceeds were paid in the name of Mr A and one percent TDS was deducted. Operative issues: identification of the transferor for capital gains, applicable holding period, taxpayer liability for capital gain, potential classification as long term capital gain, correctness of the PAN used by the GPA holder, and treatment of amounts received by Mr A if he is not the transferor.