TaxTMI 
TaxTMI 
2019 (1) TMI 209
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....here is a sufficient cause for delay in filing the appeals and therefore, it is a fit case to condone the delay. Accordingly, delay is condoned and admitted the appeals for hearing. 4. Facts of the case in brief are that assessee Smt. Kosanam Kasturibai W/o Kosanam Subba Raoalong with Smt. Adhikari Syamala had sold the land jointly, admeasuring 2.42 acres situated at RS Nos. 112/A & 112/5, Jaggaihpet Town to Sri Gadde Srihari Babu on 20/11/2006 through General Power of Attorney (GPA) holder Sri Govindram Purohit for a sale consideration of Rs. 7,50,200/- through a registered document No. 5139/2006. While registering the document, the SRO has adopted the market value of the property for payment of stamp duty at Rs. 46,85,200/-. The Assessing Officer has noted that the assessee has not offered any capital gains on the above sale transaction and therefore he issued notice under section 148 of the Income Tax Act, 1961 (for short, "the Act"). In response to that, the assessee has stated that the return of income was not filed since there was no taxable income for the assessment year under consideration. The Assessing Officer has examined GPA which is in favour of Sri Govindram Purohit ....
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....t on the land by way of GPA to Sri Govindram Purohit for repayment of debt to Sri Ashok Kumar Jain and both of them had no interest whatsoever in the land after transfer of beneficial interest to the GPA holder and also to Sri Ashok Kumar Jain. The Assessing Officer had issued a summons under section 131of the Act to Sri Ashok Kumar Jain. Accordingly Sri Ashok Kumar Jain was appeared on 25/03/2013 and sworn statement was recorded, regarding the transaction took-place between him and the assessee. Sri Ashok Kumar Jain has submitted before the Assessing Officer that he had lent an amount of Rs. 5.00 lakhs on different dates with different amounts to Smt. Kosanam Kasturibai and (late) Smt. Adhikari Syamala during the years 1995-1998 through his Accountant Sri Govindram Purohit, and not remember the exact dates and the amounts given, but he confirmed that he has totally lent an amount of Rs. 5.00 lakhs during the above period. In spite of repeated efforts, he could not collect even the principal amount lent to the above persons and hence he has passed a journal entry by debiting his capital account and crediting the debtors account for the above amount, as per the advice of his Auditor....
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.... of Rs. 46,85,200/- as a full value of consideration of the property. 5. On appeal before the ld. CIT(A), the assessee has made a detailed submissions and also placed various objections. Ld.CIT(A) referred the matter to the Assessing Officer in respect of objections raised by the assessee and after receiving the remand report, the ld. CIT(A) passed a detailed order and held that the property is transferred on the date of execution of sale deed i.e. 20/11/2006 and not on the date of execution of GPA i.e. on 29/05/2002. The relevant portion of the order of the ld. CIT(A) is extracted as under:- "I have perused the assessment order, grounds of appeal, submission of authorized representative, remand report of Assessing Officer and reply thereto by assessees authorized representative and all relevant materials available in this appeal is whether action of Assessing Officer in computing long term capital gain chargeable to tax on sale of land (Capital Asset) in the hands of appellant and co-owner in the relevant assessment year is in order. 6.1 According to appellant, the co-owners of the property, i.e. appellant and Smt Adhikari Shymala, took loan from Sri Ashok Kumar Jain to meet....
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....r. Govindaram Purohit, GPA holder nor himself received any le se income from the land subsequent to that date of signing of GPA i.e.29-05-2002. It was also admitted by them that they had not paid any land taxes for that land at any point of time. Further, at the time of execution of GPA, the appellant and other co-owner had neither received any consideration from GPA holder (Sri Govindaram Purohit) nor was there any agreement for payment and receipt of consideration in future between the two parties. Signing of GPA cannot result in transfer of beneficial interest from the appellant and co-owner to GPA holder in the absence of any consideration. GPA arrangement was made by Sri Ashok Kumar Jam, the lender, only to secure the repayment of loan by the appellant and co-owner. At best, the appellant and co-owner authorized GPA holder to represent them in a wide variety of transactions involving land. i.e. in GPA, Sri Govindaram Purohit was given rights to take loan on the property, to sell the property, to take advances on behalf of appellant and co-owner and take the sale consideration and to sign on the documents. In the Power of Attorney there is no mention about irrevocability clause....
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....s repaid to Sri Ashok Kumar Jam. This is admitted by appellant in her letter dated 22-05-2013 addressed to Assessing Officer for stay of collection of taxes. "The loan amount along with interest till June 2006 was repaid to Sri Ashok Kumar Jain" Hence, in my view, conditions of Section 53A of the Transfer of Property Act, 1882 are not satisfied at the time of signing the GPA dated 29-05-2002 executed by appellant and other co-owner when there is no receipt of consideration or part consideration or complete discharge/repayment of loan. Consequently, there is no transfer of property as per section 53A of the Transfer of Property Act, in the year 2002. As the loan was discharged in the year 2006 consequent to sale agreement dated 14-06-2006, transfer of property i.e. sale took place in the year 2006. Appellant and co-owner through the GPA transferred the property to Sri Gadde Srihari Babu in the year 2006. Hence, provisions of section 50C are attracted in the case of appellant and co-owner as the land sold is within Jaggaiah Pet Municipality limits at the time of sale of property in 2006 and hence is a capital asset liable for capital gains-tax. As per section 50C of the Act,....
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....ot have been given without payment of full purchase price and without obtaining all relevant permissions, therefore assessee was liable to capital gains on transfer taking place in A.Y.1999-2000 when irrevocable license was granted to transferee on obtaining all relevant permissions from Government Authorities and full payment of consideration. 3. Mysore Minerals Ltd., Vs. CIT 239 ITR 775: Issue related to allowability of depreciation u/s.32 on building when possession has been received against part payment but deed of conveyance not executed. Assessees case be distinguished on facts as no consideration was either received (or) mentioned in GPA agreement. Further the loan to Sri Ashok Kumar Jain was discharged only in the year 2006. (Relevant to A.Y.2007-08) 6.9 To summarise, 1) GPA dated 29.5.2002 is only authorization for selling the property, taking loan on the property and to sign on those documents. It did not amount to sale. It is not a sale cum GPA. 2) Any sale (transfer of improvable property) involves (I) seller (ii) buyer and (iii) sale consideration. In the CPA dated 29.5.2002, there is no mention of any buyer and sale consideration. 3) Availing of loan an....
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....d the material available on record and gone through the orders of the authorities below. 10. The issue involved in this appeal is whether transfer has taken place as on the date of execution of GPA dated 29/05/2002 or as on the date of registration of sale deed dated 20/11/2006. In this case, the assessee along with Smt. Adhikari Syamala executed GPA in favour of the Sri Govindram Purohit on 29/05/2002. Subsequently, Sri Govindram Purohit executed sale agreement on 14/06/2006 in favour of Sri Gadde Srihari Babu and received an amount of Rs. 6,50,000/-, the same is paid to Sri Ashok Kumar Jain on behalf of the assessee and Smt. Adhikari Syamala. Subsequently on 20/11/2006, the sale deed is executed by the GPA holder on behalf of the assessee and Smt. Adhikari Syamala and the balance amount of Rs. 50,200/- received on behalf of the assessee. The case of the assessee is that GPA is executed on 29/05/2002 to discharge the liabilities payable to Sri Ashok Kumar Jain. According to the assessee on the date of execution of GPA, both the assessees have discharged the burden of liability by executing GPA in favour of Sri Govindram Purohit as per the instructions of Sri Ashok Kumar Jain and ....
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....o Sri Ashok Kumar Jain, who submitted that by executing GPA in favour of Sri Govindram Purohit, he has not received any amount and Sri Govindram Purohit has also not received any amount and he has received only an amount of Rs. 6,50,000/- on 14/06/2006 and during the period 29/05/2002 to 14/06/2006, Sri Ashok Kumar Jain has submitted that he has not received any lease rentals and no taxes are paid by him. The assessee has raised an objection before the ld. CIT(A) by stating that the Assessing Officer has not given any opportunity to cross examine Sri Ashok Kumar Jain. The ld. CIT(A) has considered the objection raised by the assessee and called the remand report in this respect. The Assessing Officer has given opportunity during the remand proceedings to the assessee to cross examine Sri Ashok Kumar Jain. In the remand report the Assessing Officer has submitted to the ld. CIT(A) that cross examination is irrelevant, the capital gains is taxed based on the registered documents and not on the statement made by anybody. However, the opportunity to cross examination was allowed on 18/12/2014. The assessee through AR has cross examined and filed written submissions dated 19/12/2014, upo....