AMUDHA ANANDH,CHENNAI vs. ITO, CHENNAI

आदेश / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER:

2. Dr.S.Ganesan, JCIT, represented on behalf of the Revenue and Shri S.Sridhar, Adv., represented on behalf of the assessees.

to Shri S.Palanichamy. The assessees had disclosed the Capital Gains in respect of the transfer of the said land when filing their return of incomes for the AY 2002-03 which is shown at Page Nos.55 & 58 of the Paper Book. The said 27,053 sq.ft. of the land was sold as follows:

It was a submission that the AO on the ground that the sale had been & 3358/Mds/2016 :- 4 -: registered in 2009 brought to tax, the Capital Gains on transfer of the 14,307 sq.ft. of the land by applying the provisions of Sec.50C of the Act.

It was a submission that the property having already been transferred by a registered Power of Attorney and possession in respect of the said land having been handed over to Shri S.Palanichamy through the registered irrevocable Power of Attorney, the Capital Gains was not liable to be assessed for the AY 2010-11. It was also a submission that as the Capital Gains in respect of the transfer of the portion of the land had already been offered during the AY 2002-03 and the same having been accepted, the same transaction could not be taxed again in the AY 2010-11, just because, the Sale Deed was registered only during the said assessment year. The Ld.AR placed reliance on the decision of the Hon’ble Supreme Court in the case of Shri Balbir Singh Maini in Civil Appeal No.15619 of 2017 dated 04.10.2017 wherein it has been held that u/s.53A of the Transfer of Property Act once irrevocable Power of Attorney stands registered and the possession had been handed over and the consideration received, then the transfer should be completed. It was a submission that in the present case, the transfer was by registered Power of Attorney, the possession of the property had already been handed over to Shri S.Palanichamy and the consideration had already been received and the same had also been offered for Capital Gains tax during the AY 2002-03 and the same had already been accepted. It was a submission that the levy of Capital Gains by the AO in respect of the same transaction for the impugned assessment year was liable to be deleted. & 3358/Mds/2016 :- 5 -:

7. A perusal of the Assessment Order shows that the AO has brought to tax the Capital Gains in respect of the transfer of the 14,307 sq.ft. of the land by applying the provisions of Sec.50C for the AY 2010-11 on the main ground that the assessee had not been able to produce any documentary evidence, any proof of the transaction claimed, to have taken place during the year 2002. A perusal of the order of the Ld.CIT(A) shows that the Ld.CIT(A) has held that the assessees did not release the rights over the land admeasuring 14,307 sq.ft. of the land in March, 2002.

The Ld.CIT(A) has taken recourse to the decision of the Hon’ble Jurisdictional High Court in the appeal filed by the assessees in OS No.570 of 1998 dated 11.12.2003 wherein the Hon’ble Jurisdictional High Court has held that both the assessees are entitled for separate possession of 14,307 sq.ft. of the land. However, the AO & the Ld.CIT(A), it is noticed that has failed to take into consideration, the fact that the registered irrevocable Power of Attorney has been executed by both the assessees in favour of Shri S.Palanichamy and the possession in respect of the said land has been handed over to Shri S.Palanichamy and the assessees had received the consideration and had offered the same to tax during the year 2002. This being so, in view of the principles laid down by the Hon’ble Supreme Court in the case of Shri Balbir Singh Maini referred to supra, it is held that the Capital Gains, if any, in respect of the transfer of & 3358/Mds/2016 :- 6 -: the 14,307 sq.ft. of the land is assessable only during the year 2002 as has been rightly disclosed by the assessee in their returns for the AY 2002-03. Even otherwise, a perusal of the proviso to Sec.50C(1) inserted by Finance Act 2016 w.e.f. 01.04.2017 clearly admits that the provisions of Sec.50C are not to apply in the event that the date of agreement fixing the amount of consideration and the date of registration for transfer of the capital asset are not the same, then the value adopted or assessed or assessable by Stamp Valuation Authority on the date of agreement, may be taken for the purpose of computing the full value of the consideration of such transfer subject to conditions. In the present case, admittedly, the Power of Attorney is considered as the agreement and the Sale Deed executed are in two different assessment years and the consideration having already been received by the assessee on the execution of the irrevocable registered Power of Attorney and the same having been offered to tax during the AY 2002-03, the provisions of Sec.50C itself cannot be brought to play in the case of the assessees.

Order pronounced in the Open Court on December 06, 2017, at Chennai.