Taxpayer Not Property Owner, Only POA Holder: ITAT Remands Rs. 4.73 Crore LTCG Addition Matter [Read Order]

The Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT) remanded a matter involving Long-Term Capital Gain (LTCG) addition of Rs. 4.73 crore after the assessee claimed that he was not the owner of the property sold but merely a General Power of Attorney (GPA) holder.

Shri Thirupathi Rao Naineni (assessee) had not filed return of income for the Assessment Year 2017–18. Based on information received the case was reopened by the Assessing Officer (AO) as the assessee had reportedly sold two immovable properties jointly with three co-owners for Rs. 5.94 crore and Rs. 5.89 crore, while the fair market value as per stamp duty valuation was Rs. 9.90 crore and Rs. 9.82 crore respectively.

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The AO assessed the assessee’s share at Rs. 4.93 crore and made an addition of Rs. 4.73 crore under LTCG, noting that the assessee neither filed the original return nor disclosed the capital gain.

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During reassessment, the assessee stated that he was only a GPA holder and not the actual owner, and had not received any consideration. The AO rejected this claim in the absence of supporting documentary evidence.

Aggrieved by the order of the AO, the assessee filed an appeal before the CIT(A). Due to the repeated non-compliance of the assessee and failure to furnish documents, the CIT(A) dismissed the appeal.

Aggrieved by the CIT(A)’s order, the assessee filed an appeal before the ITAT. The counsel for the assessee submitted that given one more opportunity, the assessee would be able to establish that he had no ownership or capital gain liability. The counsel requested that the matter be remanded for fresh consideration.

The Counsel for the Revenue contended that ample opportunities were already provided and supported the orders of the lower authorities.

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The two-member bench comprising Shri Laliet Kumar (Judicial Member) and Shri Manjunatha G. (Accountant Member) observed that the assessee failed to submit necessary evidence before the CIT(A).

The Tribunal observed in the interest of justice, the case deemed fit to restore the matter to the file of the CIT(A) with a direction to grant one more opportunity to the assessee to submit supporting evidence regarding ownership and sale consideration.

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The Tribunal also imposed a cost of Rs. 5,000 on the assessee for earlier non-compliance and directed the payment to Telangana State Legal Aid Authorities at the Telangana High Court within a month.

The appeal of the assessee was allowed for statistical purposes.

To Read the full text of the Order CLICK HERE

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Shri Thirupathi Rao Naineni vs Income Tax Officer , 2025 TAXSCAN (ITAT) 743 , ITA No. 1258/Hyd/2024 , 04 February 2025 , Shri P Vinod , Shri Srinath Sadanala