| The Tax Publishers2019 TaxPub(DT) 4751 (Hyd-Trib) : (2019) 179 ITD 0305 : (2019) 072 ITR (Trib) 0578 INCOME TAX ACT, 1961
Section 45
The fact that the total sale consideration was paid in the year in which registered irrevocable GPA was executed could not be accepted because if the vendors had received the entire sale consideration from the vendee at that point of time then the vendors/parties or even the GPA holder could have executed the sale deed in favour of the vendee in that year itself. Therefore, the sale was only in the year, in which assessee had executed the sale deed in favour of his daughter but as assessee was not the owner, no capital gain could be brought to tax in his hands.
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Capital gains - Chargeability - Assessee executed GPA in bavour of his daughter - No sale deed executed
AO alleged that the assessee had sold the plot to his daughter not only as a GPA holder, but also as an owner of the property and had earned the capital gain therefrom. He accordingly brought the capital gains to tax. Assessee contended that in the registered irrevocable GPA executed in 1994 vendors have clearly stated that they were executing the GPA only to execute the sale deed on their behalf but there was no sale of the property by virtue of the GPA. He submitted that it was not an agreement of sale cum GPA and therefore, he was only a GPA holder. Further, he contended that the transaction was concluded in the year 1994, except for execution of the registered sale deed and hence there was no transfer in the relevant assessment year and accordingly, no capital gain had arisen. However, Revenue contended that the assessee had paid the sale consideration in the year 1994 itself and in the relevant assessment year, he had executed the sale deed in favour of his daughter therefore, there was a transfer of property from the assessee to his daughter and hence capital gain had arisen to the assessee. Held: In the instant case, assessee had executed the sale deed in favour of his daughter and in the sale deed it had been mentioned that the total sale consideration was paid in the year 1994. But that fact could not be accepted because if the entire sale consideration was paid in the year 1994, then the vendors/parties or even the GPA holder could have executed the sale deed in favour of the vendee in that year itself. Therefore, the sale was only in the year 2007 but capital gain would arise in the hands of the owners of the property and not the GPA holder. Thus, as assessee was not the owner of the property, no capital gain could be brought to tax in his hands.
Followed:Wipro Ltd. v. The Dy. CIT, Central Circle 1 (3), Bangalore (2016) 382 ITR 179 (Karn) : 2016 TaxPub(DT) 327 (Karn-HC)
REFERRED : Suraj Lamp & Industries (P) Ltd. v. State of Haryana & Anr. (2012) 340 ITR 1 (SC) : 2012 TaxPub(DT) 518 (SC),State of Rajasthan & Ors. v. Basant Nahata in (C. A. 7800 of 2001, dt. 7-9-2005)
FAVOUR : In assessee's favour
A.Y. : 2008-09
IN THE ITAT, HYDERABAD BENCH
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