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Tax Publishers
Invocation of section 50C - Power of attorney
transactions - ownership - Section 53A of transfer of property act, 1882
Facts:
Assessee
filed his return which was completed under section 143(3). Subsequently it was
reopened under section 147 and arising out of an ITAT order the reopened
assessment was dismissed in favour of the assessee. Arising out of a search on
the assessee it was alleged that he was the owner of certain transferred
properties and since the transfer value was lower than the stamp value, section
50C was invoked on the assessee and additions sustained. CIT(A) upheld the
additions partly. Contention of the assessee was that he was only a General
Power of attorney (GPA) holder for one Cyrus investments and the transfers were
done for and on behalf of the said entity besides the fact that the same
capital gain on transfer has already been declared in the hands of the
succeeding company of Cyrus investments. Accordingly it would tantamount double
taxation of the same income in two hands. The plea of the revenue was that the
assessee was the owner of the lands and the PoA was only a sham. On higher
appeal -
Held
partly in favour of the assessee that for the factual finding whether the said
capital gain was already assessed to tax in the hands of the succeeding company
the case was remanded back to the AO.
Ed. Note: The way the
case has travelled needs noting - the said lands were originally belonging
to late Paigah Khurshid Sah and the legal heirs had filed a suit for partition.
The Nizam of Hyderabad Nawab Mir Osman Ali VII then acquired a part of these
lands and was also a party to this partition suit. The Nizam sold the lands to
FE Dinshaw Ltd. then Cyrus investments who executed the PoA in favour of the
assessee. The decision also makes a good reading of PoA transactions, claim of
ownership and on lines of section 53A of TOP act, 1882 as well.
Case: Sanjeeva Prasad Ponnapula v. Dy. CIT 2023 TaxPub(DT) 3813 (Hyd-Trib)
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