2019 (1) TMI 209 - AT - Income Tax

Capital gain - tax liability - transfer u/s 2(47) of asset - whether transfer has taken place as on the date of execution of GPA dated 29/05/2002 or as on the date of registration of sale deed dated 20/11/2006 - Held that - We find that the assessee executed GPA on 29/05/2002 and in the GPA there is no sale consideration and not handed over the possession, it is only general GPA, therefore it cannot be said that on the date of execution of GPA, the assessee has transferred the property. Therefore, the Assessing Officer has rightly held that the property is transferred only on 20/11/2006 on the date of registration of sale deed by GPA holder on behalf of the assessee. CIT(A) has considered the GPA and remand report and gave a categorical finding that the transfer of the property is taken place only on 20/11/2006 and upheld the order of the Assessing Officer. Therefore, it cannot be said that the transfer has taken place through GPA on 29/05/2002. Thus find no reason to interfere with the order passed by CIT(A). Argument of the assessee that on the date of execution of GPA dated 29/05/2002, the transfer has taken place in the light of section 2(47)(vi) we find that the assessee s case does not come under the purview of section 2(47)(vi), and therefore, it cannot be said that the assessee along with Smt. Adhikari Syamala has transferred the property on 29/05/2002 on the date of execution of GPA. In the case of C. Sugumaran 2014 (11) TMI 320 - MADRAS HIGH COURT has considered the provisions of section 2(47)(vi) and held that, to attract the above section, two conditions must be fulfilled, assessee must have received consideration and possession should be given. If the above two conditions are not fulfilled, it cannot be said that there is a transfer of property as per section 2(47)(vi) of the Act. In the present case, the assessee neither received any consideration nor possession is handed over to the GPA holder, therefore, section 2(47)(vi) has no application.- Decided against assessee

Summary

Issues Involved:
1. Delay in filing appeals.
2. Determination of the date of transfer of property for capital gains tax purposes.
3. Application of Section 50C of the Income Tax Act.
4. Validity of the General Power of Attorney (GPA) as a transfer document.
5. Opportunity for cross-examination of a key witness.

Issue-wise Detailed Analysis:

1. Delay in Filing Appeals:
The appeals were filed with an 8-day delay. The assessees cited old age and ill-health as reasons for the delay. The Tribunal found sufficient cause for the delay and condoned it, allowing the appeals to be heard.

2. Determination of the Date of Transfer of Property for Capital Gains Tax Purposes:
The key issue was whether the transfer of property occurred on 29/05/2002, the date of executing the GPA, or on 20/11/2006, the date of the sale deed registration. The assessee argued that the transfer occurred on 29/05/2002 when the GPA was executed. However, the Tribunal noted that no consideration was received, and no possession was given to the GPA holder on that date. The Tribunal concluded that the actual transfer occurred on 20/11/2006, when the sale deed was executed, and the balance amount was received.

3. Application of Section 50C of the Income Tax Act:
The Assessing Officer applied Section 50C, adopting the market value of the property as ?46,85,200/- for calculating capital gains, instead of the sale consideration of ?7,50,200/-. The Tribunal upheld this application, noting that the property was within municipal limits and thus subject to capital gains tax based on the stamp duty valuation.

4. Validity of the General Power of Attorney (GPA) as a Transfer Document:
The Tribunal analyzed whether the GPA executed on 29/05/2002 constituted a transfer under Section 53A of the Transfer of Property Act, 1882. It was found that the GPA did not mention any sale consideration or transfer of possession, which are essential for constituting a transfer. Therefore, the GPA was deemed not to effectuate a transfer of property.

5. Opportunity for Cross-examination of a Key Witness:
The assessee objected that the Assessing Officer did not allow cross-examination of Sri Ashok Kumar Jain, a key witness. The Tribunal noted that during remand proceedings, the assessee was given the opportunity to cross-examine Jain. The Tribunal found that the cross-examination did not alter the conclusion that the transfer occurred on 20/11/2006.

Conclusion:
The Tribunal dismissed the appeals, affirming that the transfer of property and the resultant capital gains tax liability occurred in the Assessment Year 2007-08, based on the sale deed executed on 20/11/2006. The Tribunal upheld the application of Section 50C for valuation and found no merit in the arguments regarding the GPA constituting a transfer.