TaxTMI 
TaxTMI 
2020 (9) TMI 961
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....ound also the assessment deserves to be quashed. 3. Because the assessment framed is wrong, bad in law and without jurisdiction as the approval/sanction as required u/s 151 of the I.T Act has not been obtained. The approval, if any, is a mechanical approval which is bad in law. On this legal ground also the assessment deserves to be quashed. 4. Because the Ld. CIT(A) has wrongly, illegally and arbitrarily confirmed the addition made by the Assessing Officer under the head Capital Gain -applying the provisions of section 50C of the I.T Act. 5. Because the Ld.CIT(A) while confirming the addition has erred both on facts and in law in rejecting the appellant's specific ground and submission on the issue. Since the appellant executed the sale deed as power of attorney holder which is not in dispute, the capital gain cannot be assessed in the hands of the appellant. 6. Because the Assessing Officer has made the addition under the head capital gain solely relying on the statement of the persons who executed the power of attorney in the favour of the appellant. Ld. CIT(A) while confirming the addition has legally erred ignoring the fact that the stat....
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....he appellant on 27.08.2011. (Copy of statements enclosed - Page 42 to 78 of Paper book). They submitted that the land was sold to the appellant earlier for Rs. 2,50,000/- and they have not received the consideration in respect of the sale made by the appellant. 4. Therefore, the AO held that the appellant had sold the property as an owner and hence, the LTCG was assessable in his hands. On the basis of the available facts, the AO assessed the LTCG of Rs. 65,31,869/-. Thus, the assessment was completed at Rs, 65,31,869/-. 5. The Ld. CIT(A) without appreciating the facts and rejecting the assessee's specific submission confirmed the addition. 6. Feeling aggrieved by the order passed by the lower authorities the assessee is in appeal before us for the grounds stated hereinabove. 7. The ld. AR for the assessee had submitted that the addition made by the assessing officer and confirmed by the Commissioner appeal were provided on the wrong assumption that the assessee is the owner of the property. It was submitted that the assessee was merely the registered Power of Attorney holder, which was very workable and there is no mention of handing over of the possession to the a....
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....r enabling the transfer of property under Income Tax Act or Transfer of Property Act. f. Kindly refer Page 4 and 5 of the CIT(A) Order. ii. Statements Recorded As already submitted above, the Ld. AO recorded the statements on oath of all the six persons who were the original sellers of the land. In relation to it, following undisputed facts are laid herein:- a. The six persons denied the fact that had written any PoA in favor of the assessee. Instead they stated that they had executed sale deed in favor of the assessee for sale consideration of Rs. 2,50,000/-. b. The PoA writers stated that the land was sold to the appellant for Rs. 2,50,000/-. However, on the other hand, they denied that any amount was received to them by the appellant on the sale of land. c. They admitted in their statements that the photos affixed on the PoA and signatures thereon belonged to them but they signed the PoA believing it to be a sale deed. Refer statement of Shri. Shanti Swaroop in reply to question 5 of the AO - Page 44 of Paper book) d. The statement regarding no knowledge of the PoA and that executing the same as a sale deed is more than a lie. ....
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....TATED TO BE IRREVOCABLE LACK OF AGENCY Has not been revoked because Agent has an interest in the subject matter. A. All acts of agent on behalf and for Principal. B. The Agency Binds the Principal. C. It is the Principal that can be sued. D. It is the duty of Agent to render account to the Principal. E. Power of Attorney- Agent has been placed in a position of confidence; Fiduciary in respect of the property- He is a trustee to the Principal- Must prefer Interest of Principal to as own Bound to Account for all profits to the Principal. Sec. 212. Skill and diligence required from agent - An agent is bound to conduct the business of the agency with as much skill as is generally possessed by persons engaged in similar business unless the principal has notice of his want of skill. The agent is always bound to act with reasonable diligence, and to use such skill as he possesses; and to make compensation to his principal in respect of the direction consequences of his own neglect, want of skill, or misconduct. F. The case skill or diligence required is not that such the Agent in Fact Possesses. But such as is reasonabley nece....
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....ence of any sale consideration in the power Attorney. We are also of the opinion that the power Attorney was also revocable. 11. In the light of the above it cannot be inferred or concluded that the 6 persons have transferred the property to the assessee or in other but the assessee was the owner of the property which was sold by the assessee for a consideration of Rs. 10 lakhs on which the long-term capital gain had arisen as the guidance value was more than 69 lakhs. Further we may mention that AO can not rely on the oral statement of the alleged seller , which is contrary to the written registered document POA. In our view contrary oral statement of a person can not be accepted contrary to the registered document unless it satisfy the requisite conditions as mentioned under Evidence Act, which in present case are missing. 12. It is a settled position of law and do not require much argument that the tax liability arising out of the long-term capital gain is required to be fastened on the registered owner of the property and not on the assessee who is merely a power-of-attorney order. We may also been to record that, the assessee has set up his case being that of the power A....
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....ransfer of rights has been characterised as being effected or dependent upon or flowing from the transfer of a share or shares of a company registered or incorporated outside India;) Section 53A of the Transfer of Property Act, 1882: 53A. Part performance.- Where any person contracts to transfer for consideration any immoveable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty, and the transferee has, in part performance of the contract, taken possession of the property or any part thereof, or the transferee, being already in possession, continues in possession in part performance of the contract and has done some act in furtherance of the contract, and the transferee has performed or is willing to perform his part of the contract, then, notwithstanding that where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed therefor by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming ....
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....rring title to the grantee. In State of Rajasthan v. Basant Nehata - 2005 (12) SCC 77, this Court held : "A grant of power of attorney is essentially governed by Chapter X of the Contract Act. By reason of a deed of power of attorney, an agent is formally appointed to act for the principal in one transaction or a series of transactions or to manage the affairs of the principal generally conferring necessary authority upon another person. A deed of power of attorney is executed by the principal in favour of the agent. The agent derives a right to use his name and all acts, deeds and things done by him and subject to the limitations contained in the said deed, the same shall be read as if done by the donor. A power of attorney is, as is well known, a document of convenience. Execution of a power of attorney in terms of the provisions of the Contract Act as also the Powers-of-Attorney Act is valid. A power of attorney, we have noticed hereinbefore, is executed by the donor so as to enable the donee to act on his behalf. Except in cases where power of attorney is coupled with interest, it is revocable. The donee in exercise of his power under such power of attorney only act....
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....legally valid modes of transfer is likely to create hardship to a large number of persons who have entered into such transactions and they should be given sufficient time to regularize the transactions by obtaining deeds of conveyance. It is also submitted that this decision should be made applicable prospectively to avoid hardship. 18. We have merely drawn attention to and reiterated the well-settled legal position that SA/GPA/WILL transactions are not 'transfers' or 'sales' and that such transactions cannot be treated as completed transfers or conveyances. They can continue to be treated as existing agreement of sale. Nothing prevents affected parties from getting registered Deeds of Conveyance to complete their title. The said 'SA/GPA/WILL transactions' may also be used to obtain specific performance or to defend possession under section 53A of TP Act. If they are entered before this day, they may be relied upon to apply for regularization of allotments/leases by Development Authorities. We make it clear that if the documents relating to 'SA/GPA/WILL transactions' has been accepted acted upon by DDA or other developmental authori....