Home › Income-Tax Act › Devender Kaur (Smt.) v. ITO (2021) 87 ITR 49 (SN) (Jaipur)(Trib.)

Devender Kaur (Smt.) v. ITO (2021) 87 ITR 49 (SN) (Jaipur)(Trib.)

S. 45 : Capital gains-General power of Attorney-Mere non production of the owner of the property could not, per se, cast liability of tax upon the assessee-The assessee has discharged the onus upon her-General power of Attorney has no right in the property and the General power of Attorney holder is only the agent under the Contract Act, the addition made for the long term capital gain on the assessee (GPA) deleted. [S. 148]

The AO issued the notice u/s 148 of the Act on the basis of the information for the sale of residential property. The residential property in question was purchased by the owner “T” the sister of the assessee. ‘T’ gave a General Power of Attorney to the assessee, which was registered with Sub-Registrar. By virtue of the valid and alive General Power of Attorney, the conveyance deed for the sale of the property in question has been executed by the assessee as Power of Attorney Holder on 23-09-2009.

During the course of assessment proceedings, in discharge of the onus under the law, the assessee furnished and placed on the records of the AO all the cogent and corroborative documentary evidences demonstrating therein the fact that the assessee is only General Power of Attorney Holder and not the owner of the house property in question. Instead of conducting further inquiry by exercising power u/s 131 of the Act calling the owner ‘T’ for necessary examination, the AO insisted the assessee to produce the owner ‘T’ and merely non production or attendance of owner ‘T’ the AO inferred that the assessee is liable for taxability u/s 45 of the Act and accordingly, passed the order making addition of Rs. 9,22,312/-in the hands of the assessee for the alleged Long Term Capital Gain. Being dissatisfied, the assessee filed the appeal before the CIT (Appeals), but could not succeed.  On further appeal before the ITAT, the Hon’ble ITAT observed that the AO has failed to conduct any inquiry and to bring any material or fact to establish anything contrary to the materials/explanations given by the assessee. Following the ratio laid down by the Supreme Court in the case of Shiv Kumar & Anr. v. UOI  Civil Appeal No. 8003 of 2019 arising out of SLP No. 24726/2019 D.N 25495 of 2019 and the judgment of the coordinate Bench in the case of Shri Gyan Chand Saini v. ITO (ITA No. 87/JP/2019 dtd. 25-11-2019) having the similar issue, the addition made by the AO in the hands of the assessee has been held unwarranted, without jurisdiction and the same is directed to be deleted.. (AY 2010-11)