TaxTMI 
TaxTMI 
2014 (3) TMI 1181
X X X X Extracts X X X X
X X X X Extracts X X X X
....r passed u/s 163 deserves to be quashed. 2. That the Ld. CIT(A) has grossly erred in upholding the assessee as agent of Smt. Pamela Jean, arbitrarily, when the assessee has discharged his onus by providing the local address of her. 2.1. Further that the Ld. CIT(A) has grossly erred in not appreciating the fact that the Ld. AO has not conducted any enquiry under the Income Tax Act, 1961 against Smt. Pamela Jean, when her local address was available with the department before fixing the assessee as representative assessee of her. 2.1 We have heard the rival submissions and have carefully perused the material on record. Briefly stated the facts of the case are that the assessee was appointed as attorney in respect to the properties situated at 55, Alexander Compound, Agra Road, Jaipur vide a duly executed instrument titled as 'power of attorney' on 21.03.2005 and on the basis of such attorney, the assessee executed two sale agreements through which the immovable property owned by Smt. Pamela Colleco was transferred to two independent buyers for a total consideration of Rs. 3.00 crores (Rs. 1.50 crores each) and since the sale proceeds were received against the sai....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o give evidence regarding actual address of Ms. Pamela Colleco. 2. There is no information or evidence on record that her case was being assessed in Mumbai. 3. The Ld. AO sent notice u/s 133(6) to her at Mumbai address but no reply was received. All the above allegation of the Ld. CIT(A) do not find force in view of following facts:- 1. The assessee has informed complete local address to the Ld. AO of Smt. Pamela Colleco and same was also mentioned in the sale deed and further stated that she was available in India at the time of execution of sale deed. 2. Further only a single notice issued u/s 133(6) to her at Mumbai address which was duly served on her as the same was not returned back by the postal authorities being remained unserved. Though, no reply was received against the said notice, however, had the Ld. AO been made any further enquiry at her local address he would have been able to locate her. But the Ld. AO without making any further enquiry and making further efforts has hold that Smt. Pamela Colleco was not available in India. It is further submitted that the Ld. CIT(A) has fully ignored the fact that the jurisdiction for asse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....onours that while initiating proceedings u/s 163, a notice was issued to the assessee to show cause against his proposed appointment as agent of Smt. Pamela Colleco under the said section. In response to such notice, reply was duly filed before the Ld. A.O. wherein the proposal to appoint assessee as agent was strongly contested and agitated on the ground that while the non-resident lady Smt. Pamela Colleco herself is available at the address specified in the sale deed itself, there is no reason to appoint assessee as her agent, particularly when assessee was a mere Power of Attorney holder in respect of the aforementioned land. However, the Ld. A.O. brushed aside the representation made by assessee merely on the score that the Power of Attorney could not be filed along with the submissions. It may be noted that this in itself is not a plausible ground to reject the entire submission and in case, if the Ld. A.O. proceeds to reject such submissions then a second opportunity must be given, more particularly when the assessee was willing to furnish the same on next hearing, which however was never afforded to him. The Ld AO by arbitrarily rejecting the submissions made, proceeded to p....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 2.1 When the Non-resident herself is available to be proceeded with assessment proceedings, it was not lawful for the A.O. to assesses the appellant in respect of an income which should have been assessed in the hands of Non-resident directly: It is well understood that if the Non-resident himself/herself is available in the country, and can be assessed for income accrued or arisen to him/her in India. In the instant case also, at the time when capital gains from the transfer of said lands arose in favour of Non-resident, the lady Smt. Pamela Colleco herself who was the real owner of the property and was residing in the country at her local address in India. The said address was mentioned on the sale deed itself and was duly supplied to the Ld. A.O. Therefore, the Ld. A.O. was obliged to make substantial inquiries from the lady herself. The Ld. AO has not made any effort to tax the income arise of sale of above property in the hands of real owner. However, the Ld. AO has merely done an empty formality in the name of enquiry against Smt. Pamela Colleco. He had issued just one notice u/s 133(6) of the Income Tax Act, 1961. 2.2 Mere empty formality wa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ative assessee u/s 163. The department could very well proceed to assess her towards the tax liability, if any, for the transaction made by her in India. Thus the observation of the Ld. CIT(A) deserves to be ignored and excluded. The Ld. AO ought to have made the enquiry to bring the real owner of the property into tax net but the Ld. AO opted to hold the assessee as representative assessee in terms of provisions of section 163. It is further submitted that the assessee has discharged his obligation u/s 163 of the Income Tax Act, 1961 when the local address of a non-resident is informed to the department and therefore the assessee is not liable for any liability in terms of the section 163 of the Income Tax Act, 1961." 2.5 Per contra, the ld. CIT ( DR) has supported the order of the AO and justified the action of the AO of treating the assessee as agent of Smt. Pamela Colleco. 2.6 After carefully considering the rival submissions on this issue and further going through the decisions relied upon by the ld. AR, we are of the considered opinion that the jurisdiction in the case of NRI Smt. Pamella Colleco is not confined to Mumbai and it applies to those cases only wher....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e facts of the case relied on by the AR are that CESC had engaged L & P as its lawyers in respect of some of its deals. In respect of such deals, the CESC had made payment to L & P. CESC had also deducted tax u/s 195, before making payment to L & P. Such deduction was made with the approval of the AO of the CESC having jurisdiction to assess the income of CESC, as well as with the approval of the RBI. The L & P had received income from the CESC. Therefore, u/s 163(1)(b) and (c), the CESC is a deemed agent of L & P. As such agent, it was sought to be treated as 'representative assessee' of the non-resident. The assessment of the non-resident was being made at the hands of the non-resident before the Deputy CIT, Mumbai, who had jurisdiction to deal with the assessment. Upon receipt of the notice from DCIT, Mumbai, the CESC had submitted to the jurisdiction and had represented the case. The Hon'ble High Court observed that :In its individual capacity the representative may be subject to assessment of the authorities under the statute at Calcutta. But when it is not being assessed in its individual capacity but in the capacity of representative of the non-resident, who is being assesse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e tactics. To this extent the facts of the case are different from the facts of the case relied on by the AR. Moreover, the defect pointed out regarding denial of sufficient opportunity to the assessee while passing an order u/s 163, it is noted that his submissions therein were considered, and a finding was given on the basis of the facts of the case in paras 3.4 (4) & (5) of this order. To that extent the defect of lack of opportunity in the order u/s 163 was cured while passing the appellate order. During the course of appellate proceedings the AR has furnished a copy of power of attorney by Ms. Pamela Jean Koleko resident of 22, Moselle Close, Farnborough, Hants GU 14 9YB dated 23.03.2005 in favour of Shri Banwari Lal Sharma with respect to her property and affairs pertaining to property at 55, Alexander Compound, Agra Road, Jaipur, Rajasthan, India. Given the fact that the AR of the appellant himself has filed this evidence showing that the power of attorney had been signed by Ms. Pamela Jean Koleko in favour of Shri Banwari Lal Sharma for the land under consideration and this was subsequently transferred by him, and the sale deeds were signed by him as legal....
X X X X Extracts X X X X
X X X X Extracts X X X X
....for the A.Y. 2008-09. 3.2 The revenue has raised the following grounds in its appeal. "Whether on the facts and in the circumstances of the case and in law the Ld. CIT(A) is justified in :- 1) Holding that Shri Banwari Lal Sharma only and not Shri Vivek Gupta, was an agent of Smt. Pamela Jeans Colleco for A.Y. 2008-09 in respect of her income from Capital Gain on sales of one property by Shri Banwari lal Sharma as power of attorney holder of Smt. Pamela Jeans Colleco, ignoring the fact that unregistered power of attorney was neither signed by Shri Banwari Lal Sharma nor by the Witness. 2) Holding that the assessee Shri Vivek Gupta was not a agent of Smt. Pamela Jeans Colleco u/s 163(1) for A.Y. 2008-09 in respect of her income from Capital Gain on sales of one property by Shri Banwari Lal Sharma, Shri Vivek Gupta ignoring the provision of section 163(d) of I.T. act, 1961 wherein "Agent" is defined as any person in India who has acquired by means of transfer of a Capital Assets in India. 3) Holding that the assessee Shri Vivek Gupta was not an agent u/s 163(1) of Smt. Pamela Jeans Colleco for A.Y. 2008-09 in respect of her income from Capital G....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e legal position is crystal clear the matter cannot be remitted for reexamination. He also relied upon the decision of the Third Member of Delhi Bench of ITAT in the case of ACIT Vs. Anima Investment Ltd. reported in 73 ITD 125, wherein it has been held that no party could be given second inning at the detriment of the other party. 3.8 After considering the rival submissions we have found that the assessee has been held as an agent of Smt. Pamela Colleco as the assessee has purchased a property owned by her through Banwari Lal Sharma who was the power of attorney holder. While deciding the similar issue in appeal in ITA No. 890/JP/12 (surpa) in respect to the power of attorney holder Shri Banwari Lal Sharma, we have already hold the Banwari Lal Sharma as the agent and representative assessee u/s 163(1)(c) of the Act for the income from capital gain arising from the transfer of the immovable properties through two sale deeds, one of which related to the assessee. Therefore, by following our orders in ITA No. 890/JP/12 in the case of Banwari Lal Sharma (supra), we find no reason to hold the assessee Shri Vivek Gupta as representative assessee for Smt. Pamela Colleco in respect to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... has purchased an immovable property owned by Smt. Pamela Colleco in terms of the sale deed made and executed between the assess as buyer and Shri Banwarilal Sharma as the seller (a power of attorney holder of the real owner of property Smt. Pamella Colleco) which is available in the paper book filed by the assessee. The seller i.e. Smt. Pamela Colleco was represented by Banwari Lal Sharma who is holding power of attorney executed in his favour by Smt. Pamela Colleco in respect to the property transferred. Since the seller i.e. Smt. Pamela Colleco or her legally appointed power of attorney holder Banwari Lal Sharma had not paid due taxes on the income arising from the sale of property purchased by the appellant, therefore, the appellant was held as an agent of Smt. Pamela Colleco u/s 163(1) for A.Y. 2008-09 in respect of income from capital gains on sale of the property purchased by the assessee. 4.3 Aggrieved, the assessee went in appeal before the ld. CIT(A) who has allowed the grounds taken by the assessee and has held that the assessee could not be treated as an agent of Smt. Pamela Colleco for A.Y. 2008-09 in respect of her income on account of capital gains arising on the ....