HAJIRA BEGUM,CHENNAI vs. ITO, CHENNAI

This appeal is filed by the assessee, aggrieved by the order of the Learned Commissioner of Income Tax(A)-13, Chennai dated 23.03.2017 pertaining to assessment year 2010-11.

The assessee has raised the following grounds for adjudication.

The facts of the case are that the assessee has not filed return of income for AY 2010-11, it was only when information were received to the department through SRO and from the copy of the sale deed document No.729/2010 dated 16,11.2009, the AO come to know about the sale of property by the assessee through the power agent. Again the sale consideration shown therein the sale deed and the stamp duty value levied by the SRO i.e. stamp duty valuation authority was different. Therefore, the AO has reason to believe that in view of see.50C of the Income Tax Act the income had escaped assessment Therefore the AO issued notice u/s 148 and in finalising re-assessment proceedings, the AO sought clarification from the assessee. It was contended by the assessee before the AO that she had executed power of attorney on 12.01.2007 in favour of Shri G.Sridhar Reddy in F.Y 2007-07 and consideration of Rs.3.30,000/- was received. In support of her claim, she has relied on Shri G.Sridhar Reddy’s confirmation letter dated 02.06.2016. According to the assessee, the sale deed dated 16.11.2009 was wholly executed by Shri G.Sridhar Reddy and therefore she is not in any manner connected to the sale transaction, Relying on this, the appellant claims that capital gains has arisen in A.Y 2007-08 and accordingly, long term capital gains arrived at was within the taxable limit of `1,35,000/- for assessment year 2007-08. Hence, return for the same year was also as such not filed. Mr.G.Sridhar Reddy had produced the confirmation letter dated 02.06.2016 written by the power agent, who had confirmed that he had paid `3,30,000/- by cash to assessee as consideration amount from Mr.Harish before the GPS registration. Subsequently, the property was sold to Suganthi Kumaresan and the sale consideration was received by Harish. The AO came to a conclusion that the POA holder has acted on behalf of the assessee and hence the assessee is liable for long term capital gains and completed the assessment by bringing the long term capital gains of `11,94,327/-. Aggrieved by the order of ld. Assessing Officer, the assessee carried the appeal before the Ld.CIT(A).

I have heard both the parties and perused the material on record. The main pleas of assessee is that the asset was transferred to the assessee by way of power of attorney and transfer took placed through the power of attorney on the date 12.01.2007, so the provisions of the section 50C cannot be invoked in the assessment year under consideration. We have carefully gone through the power of attorney cited supra. As per power of attorney “Mrs.Ajira Begum only given power of attorney who can act on behalf of her and she has confirmed in the clause-18 of the power of attorney that under this power of attorney she has not received any consideration from the lawful attorney relating to the schedule mentioned property.

In my opinion, the transfer took place through sale deed dated 16.11.2009, which is a valid legal document wherein it was mentioned that sale consideration was actually passed between the parties therein. When the circumstances like this, the assessee has produced one confirmation letter from Mr.G.Sridhar Reddy stating that he has paid ` 3,30,000/- vide power of attorney dated 12.01.2007. Hence, in my opinion, this is a self serving document for which I cannot give any credit, as it is contrary to the legal documents, which were duly registered. Accordingly, I am of the opinion that lower authorities are justified in invoking the provisions of the section 50C of the Act. Thus, this ground raised