The Income Tax Appellate Tribunal (ITAT) Delhi bench (“SMC” New Delhi) held that PoA Holder is not ‘owner’ of the property and not considered as Capital Gain Tax.
Sidharth Chaudhary, the appellant has filed an appeal against the order of the assessing authority who computed capital gain purely on the basis of conjectures. The Assessing officer has recorded that assessee vide letter dated 8.11.2016 intimated that he had not sold any property. He was having the power of attorney of his mother in respect of land admeasuring 1288 sq. yards in Shaheed Malkhan Singh Colony, Gharaunda.
However, the Assessing Officer made addition on the basis that the entire sale proceeds amounting to Rs.55, 76,000/- had been credited in the account of the assessee, therefore, being the actual beneficiary; addition was made in his hand.
Counsel for Appellant submitted that the authorities below have not appreciated the facts in right perspective and have grossly erred in computing the capital gain in the hands of the assessee. He submitted that the action of the Assessing officer is unjustified and patently illegal.
The counsel on behalf of revenue contended that the evidence in support of the claim by assessee was not submitted and he has not been able to submit the details pertaining to the ownership of the said plots viz. eleven registered deeds which he states do not belong to him.
The single bench of Shri Kul Bharat observed that there is no ambiguity under the law for chargeability of capital gain in respect of transfer of any capital asset. It is the owner of capital assets who would be liable for capital gain. In case the sale consideration is credited into the account of a third party or the attorney of such owner, in that event also the money which has been credited in the account of the third party or the power of attorney cannot be subjected to tax under the head ‘capital gains’.
Therefore, the action of the authorities below is contrary to the statutory provisions. The money credited to the account of the assessee could not have been subjected to tax as a capital gain earned by the assessee.
Under these facts, the addition made by the Assessing officer under the head of ‘capital gain’ is not justified. Hence, the Assessing Officer is directed to delete the addition and this appeal is allowed.
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