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TMI Blog2014 (11) TMI 320X X X X Extracts X X X X X X X X Extracts X X X X ..... Whether the Tribunal was legally justified in not taking cognizant of the letter of the seller of the property to M.Viswanathan to the effect that he had received a sum of Rs. 25 lakhs for executing a power of attornery on 01.09.2006 in favour of the assessee? 3. Whether the finding of the Tribunal is correct especially when Section 2(47)(vi) of the Incometax Act brings within its ambit of the transfer, enjoyment of the property right through power of attorney agreements?" 2. The assessment in this case relates to the assessment year 2009-10. The assessee is an individual. He is a power agent of one Mr.M.Viswanathan, who is the actual owner and vendor of the property. The said Viswanathan entered into a registered power of attorney on 01 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gal proceedings and or defend suits or cases filed and in that connection to engage advocate, to sign vaklaths, plaints, affidavits, petitions, pleadings, statement and also to give evidence before competent court. 18 & 19..... 20) to advertise for sale of the schedule mentioned property either as whole or as undivided share 21) to do all things necessary and essential for proper management of our property including disposal and completion of sale of the schedule property. And generally to do the such act are necessary and incidental in this regard. No consideration is received from power agent for giving this power of Attorney. The power agent shall maintain proper accounts and render the same. The property right has not been handed ov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umaran, in the year 2006 itself, held that the recital contained in the registered power of attorney dated 01.09.2006 does not show that any consideration was paid to the actual owner and the assessee had acted merely as an agent. The letter of the owner that he had received only Rs. 25.00 lakhs at the time of executing the power of attorney, which is a subsequent statement by the said owner did not inspire the confidence of the Tribunal to accept the Department's plea. The Tribunal laid emphasis on the registered document, namely, Power of Attorney, in letter and spirit holding that there was no consideration paid at the time of executing the power of attorney. The Tribunal also gave a finding that there was no supporting evidence exce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her association of persons or by way of any agreement or any arrangement or in any other manner whatsoever) which has the effect of transferring, or enabling the enjoyment of, any immovable property." 9. To support his plea, he also relied upon circular No.495 dated 22.9.1987, to submit that the arrangements by way of power of attorney would also come within the purview of Section 2(47) of the Income Tax Act. The relevant portion of the circular reads as follows: "11.1 The existing definition of the word "transfer" in s.2(47) does not include transfer of certain rights accuring to a purchaser, by way of becoming a member of or acquiring shares in a co-operative society, company, or association of persons or by way of any agreement or any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sferring or enabling the enjoyment of any immovable property would get the character of transfer. 11. In the present case, we find that there is no transfer to or enabling enjoyment of property in favour of the assessee in any manner and therefore, sub-clause (vi) of Section 2(47) of the Income Tax Act does not get attracted. Clause 21 of the power of attorney, which has been already referred to supra, clearly reveals that no consideration was received from the power agent for appointing him as power of attorney. It also emphasised therein that the property right has not been handed over to the power agent. We are, therefore, unable to accept the plea of the Revenue that there was an element of transfer or enabling enjoyment in favour of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of transfer or enabling enjoyment of property right as stated in paragraph 11.2 of the circular by the power of attorney holder. 13. We find no such recital in the power of attorney as extracted by the Tribunal and referred to by us. On the contrary, the terms of the power of attorney clearly show that property rights has not been transferred to the power of attorney holder and there is also no provision for enabling enjoyment. It is not the case of the Department that the power of attorney is sham. If they accept the power of attorney is valid, then the plea of capital gains at the hands of the assessee has no legs to stand. Accordingly, we find no merits in this Tax Case (Appeal). 14. In the result, this Tax Case (Appeal) stands dis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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