PALLAVA RESORTS PRIVATE LIMITED,CHENNAI vs. DCIT, CHENNAI

This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-3, Chennai, dated 20.01.2016 and pertaining to assessment year 2011-12.

Shri S. Sridhar, the Ld.counsel for the assessee, submitted that the Assessing Officer said to have received information regarding sale of land in Survey no.91/3B2B situated in Mammallapuram Village, Chengalpet Taluk, Kanchipuram District. On the basis of said information, according to the Ld. counsel, the Assessing Officer found that there was a transfer of property by means of a registered sale deed executed by power of attorney agent of the assessee and accordingly, levied capital gain tax. Referring to the copy of agreement for sale, the Ld.counsel submitted that the agreement was executed on 17th July, 2007. On the basis of the said agreement, the capital gain tax was assessed by the Assessing Officer. This Tribunal also confirmed the assessment of capital gain for assessment year 2008-09 in I.T.A.

On the contrary, Shri Hari Govind, the Ld. Departmental Representative, submitted that the assessee executed an agreement for sale of property and also executed power of attorney in favour of the purchaser. According to the Ld. D.R., the agreement for sale was dated 17.07.2007. The power of attorney was executed on 23.07.2007 and the sale deed was actually registered on 19.03.2008. Since the power of attorney executed the sale deed and it was registered on 19.03.2008, according to the Ld. D.R., the Assessing Officer has rightly assessed the capital gain during the assessment year under consideration.

We have considered the rival submissions on either side and perused the relevant material available on record. On the basis of agreement for sale dated 17.07.2007, the Assessing Officer appears to have levied capital gain tax for assessment year 2008- 09 and this was also confirmed by this Tribunal by an order dated 11.10.2012. On the basis of power of attorney, the power of attorney holder appears to have executed sale deed in favour of third parties on 03.06.2010. Therefore, the Assessing Officer on the basis of information said to be received from the Sub-Registrar, found that the assessee executed the sale deed through power of attorney agent on 03.06.2010, and, the capital gain has to be assessed only during the year under consideration.

The fact remains that on the basis of agreement for sale, the capital gain was assessed and the assessee claims that this Tribunal also confirmed the capital gain tax levied by the Assessing Officer. The agreement for sale was executed in favour of one Shri C. Ramakrishna and the power of attorney was also executed in favour of Shri C. Ramakrishna. On the strength of power of attorney executed in favour of Shri C. Ramakrishna, he executed sale deed in favour of third parties. Therefore, there was a confusion in whose hands the capital gain tax has to be levied when the property was actually transferred by way of a registered sale deed dated 03.06.2010. As far as the assessee is concerned, the capital gain tax was already levied and this Tribunal also appears to have confirmed the tax levied.

In view of this factual situation, this Tribunal is of the considered opinion that the matter needs to be re-examined by the Assessing Officer. Accordingly, orders of both the authorities below are set aside and the entire issue is remitted back to the file of the Assessing Officer. The Assessing Officer shall re-examine the matter in the light of the material that may be filed by the assessee and find out when actually the property was transferred and thereafter decide the issue afresh in accordance with law, after giving a reasonable opportunity to the assessee.

In the result, the appeal filed by the assessee is allowed for statistical purposes.