GYAN CHAND AGARWAL, Jaipur V. ADDL. CIT, Jaipur

ITA 266/JPR/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1996 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 07-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VIJAY GOYAL C A SHR
• Keywords: Capital asset; Business income; Corroborative evidences
• Section: 143(3); 12

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH HKKXPUN] YS[KK LNL; ,OA JH DQY HKKJR] U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM AND SHRI KUL BHARAT, JM VK;DJ VIHY LA-@ ITA NO. 266/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11. SHRI GYAN CHAND AGARWAL, 25, DAYAL NAGAR, GOPAL PURA BY PASS, JAIPUR. CUKE VS. THE ADDL. COMMISSIONER OF INCOME - TAX, CIRCLE-6, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAMPA 9797 J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI VIJAY GOYAL (C.A.) JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A. VERMA (ADDL. CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 20.06.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 10.07.2017 VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT (A), AJMER, DATED 10/01/2017 PERTAINING TO A.Y. 2010-11. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. CIT(A) ERRED IN CONFIRMING THE ACTION AND FINDING O F LD. AO REGARDING:- TREATING THE INCOME OF RS. 7,50,000/- UNDER THE HEA D AS INCOME FROM OTHER SOURCES A AGAINST THE RECEIPTS EARNED F ROM BROKERAGE INCOME AND DECLARED UNDER THE HEAD OF BUSINESS & PROFESSION. DISALLOWING THE EXPENSES OF RS. 1,76,583/- CLAIMED OUT OF BUSINESS RECEIPTS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. CIT(A) ERRED IN CONFIRMING THE ACTION AND FINDING O F LD. AO REGARDING:- TREATING THE LAND SOLD ON BEHALF OF SHRI SULTAN MEE NA AS OWNED BY THE ASSESSEE WITHOUT CONSIDERING THE FACT THAT THE ASSESSEE EARNED 2 ITA NO. 266/JP/2017 SH. GYAN CHAND AGARWAL, JAIPUR. ONLY BROKERAGE ON THIS TRANSACTION AND WITHOUT BRIN ING ANY MATERIAL ON RECORD WITH REGARD TO THE OWNERSHIP OF THE SAID LAND TO THE ASSESSEE. TREATING THE SALE CONSIDERATION OF RS 2,69,37,000/- OF LAND OF SHRI SULTAN MEENA AS INCOME OF THE ASSESSEE UNDER THE HE AD INCOME FROM OTHER SOURCES WITHOUT APPRECIATING THE FACT I N JUDICIAL PERCEPTION THAT THE ASSESSEE HAS ACTED IN THE CAPAC ITY OF POWER OF ATTORNEY AND THE ASSESSEE WAS NOT OWNER OF THE LAND WHICH IS APPARENT FROM THE REGISTERED SALE DEED AND EVEN OTH ERWISE ALSO IF THE ASSESSEE IS TREATED ZS OWNER OF THE LAND THEN A LSO PROFIT IS ASSESSABLE UNDER THE HEAD CAPITAL GAIN NO UNDER INCOME FROM OTHER SOURCES. 3. THE ASSESSSE PRAYS FOR LEAVE TO ADD, TO AMEND, TO D ELETED, OR MODIFY THE ALL OF ANY GROUND OF APPEAL ON OR BEFORE THE HEARIN G OF APPEAL. 2. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE AS SESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S 143(3) O F THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VID E ORDER DATED 22/03/2013. WHILE FRAMING THE ASSESSMENT THE AO MADE DISALLOWANCE OF EXPENDITURE OF RS. 1,76,583/- TREATED THE SALE CONSIDERATION OF AGRICULTURAL LAND ADMEASURING 5.27 HECTARES COMPRISED OF KHASRA NO. 534, 535, 536, 537, 538, 54 1, 542 AND 546 SITUATED IN THE REVENUE AREA OF VILLAGE JAI SINGH PURA BAS DISTRICT JAIPUR, RASJASTHAN, AS INCOME FROM OTHER SOURCES. AGGRIEVED BY THIS, THE ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS ALSO AFFIRMED THE VIEW OF THE ASSESSING OFFICER. 3. NOW, THE ASSESSEE HAD FILED THE PRESENT APPEAL B EFORE THIS TRIBUNAL. 4. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT GROUND NO. 1 IS ALSO RELATED TO GROUND NO. 2, THERE FORE, HE WISH TO MAKE ARGUMENT IN RESPECT OF GROUND NO. 2, FIRST. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE 3 ITA NO. 266/JP/2017 SH. GYAN CHAND AGARWAL, JAIPUR. SUBMISSIONS AS MADE IN THE WRITTEN SUBMISSIONS. TH E SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE ON THIS GROUND ARE AS UNDE R:- 3.3 SUBMISSION OF ASSESSEE (I) THE ASSESSEE HAS FILED COMPLETE DETAILS:- THE ASSESSEE HAS FILED ALL THE REQUISITE DETAILS/IN FORMATION VIDE LETTER DATED 17-10-2012 (PB PG 23-27), DATED 04-02-2013 (PB PG 28- 30) DT 25-02-13 (PB PG 31-35) DATED 27-02-2013 (PB PG 36) AND DT 18-03-2013 (PB PG 37-39) . THE ASSESSEE HAS DISCHARGED HIS ONUS AND PROVED THAT THE IMPUGNED PROPERTY WAS OWNE D BY SHRI SULTAN MEENA AND HE HAS ACTED AS AN AGENT OF SHRI S ULTAN MEENA IN SALE TRANSACTION OF THE IMPUGNED PROPERTY. THE ASSE SSEE HAS EARNED ONLY BROKERAGE INCOME IN THE TRANSACTION AND NOTHIN G MORE. THE DETAILS FILED BY THE ASSESSEE/EXPLANATION GIVEN BY THE ASSESSEE FROM TIME TO TIME WAS AS UNDER:- (I) COPY OF POWER OF ATTORNEY DATED 20/01/2007 EXECUTE D BY SHRI SULTAN MEENA IN FAVOUR OF ASSESSEE COPY AT PB PAGE 40-45. THIS POWER OF ATTORNEY IS ALSO SIGNED BY TWO INDEPENDENT WITNESS AND THE AO DID NOT MAKE ANY INQUIRY FROM TH E WITNESSES. (II) COPY OF REVENUE RECORDS OF THE LAND WHICH SHOWS THE OWNERSHIP OF THE LAND VESTED WITH SHRI SULTAN MEENA COPY AT PB PAGE 53-65 (III) COPY OF SALE DEED VIDE LETTER DATED 04/02/2013 COPY AT PB PAGE 46-52 WHEREIN THE STATUS OF THE ASSESSEE IN TRANSACTION WAS AN AGENT OF SHRI SULTAN MEENA. THIS SALE DEED WAS A LSO SIGNED BY 4 ITA NO. 266/JP/2017 SH. GYAN CHAND AGARWAL, JAIPUR. TWO WITNESSES. NO ANY INQUIRY WAS MADE BY AO FROM T HE PURCHASER OF THE LAND AND WITNESSES. THE ASSESSEE HAS SUBMITTED DETAILED REPLY FROM TIME TO TIME AS UNDER:- VIDE LETTER DATED 25/02/2013 'PERSONAL PRESENCE OF SHRI SULTAN MEENA THE ASSESSEE HAS NO REGULAR DEALING WITH SHRI SULT AN MEENA AND PRESENT WHERE ABOUT OF SHRI SULTAN MEENA IS NOT KNO WN TO THE ASSESSEE, THEREFORE THE ASSESSEE IS NOT ABLE TO PRO DUCE SHRI SULTAN MEENA BEFORE YOUR HONOUR. IT IS RELEVANT TO MENTION HERE THAT THE ASSESSEE MAKE ARRANGEMENT FOR SALE OF LAND OF SHRI SULTAN MEENA SITUATED AT VILLAGE JAISINGHPURA BASS, BHAKROTA, PA TWAR HALKA JAISINGHPURA, TEH. SANANER, DISTT. JAIPUR AND IN LI EU OF THAT THE ASSESSEE GOT COMMISSION FROM SHRI SULTAN MEENA. SIN CE SHRI SULTAN MEENA WAS NOT ABLE TO GO TO REGISTRAR OFFICE, THERE FORE HE GAVE POWER OF ATTORNEY TO ASSESSEE AND THE ASSESSEE SING ED THE SALES DEED OF LAND OF SHRI SULTAN MEENA IN THE CAPACITY O F HIS POWER OF ATTORNEY HOLDER AND THE SAME FACT IS MENTIONED ON T HE REGISTRY.' VIDE LETTER DATED 18/03/2013 'SALE OF LAND. WITH REGARD TO YOUR QUERY AS PER PARA 3 OF THE NOTI CE IN RESPECT OF TRANSACTION OF LAND OF SHRI SULTANA MEENA, ALL THE REQUISITE DETAILS/INFORMATION HAS ALREADY BEEN FILED VIDE LET TER DATED 27-02- 2013, 04-02-2013 AND 26-10-2012. THE ASSESSEE HAS A LREADY DISCHARGED HIS ONUS OF ESTABLISHING PROPERTY OWNED BY SHRI SULTANA MEENA AND ON SALE TRANSACTION OF THIS PROPERTY THRO UGH US , THE 5 ITA NO. 266/JP/2017 SH. GYAN CHAND AGARWAL, JAIPUR. ASSESSEE HAS EARNED INCOME FROM COMMISSION/BROKERAG E, WHICH HAS BEEN DULY DISCLOSED IN THE RETURN OF INCOME. WITHOUT PREJUDICE TO OUR ABOVE SUBMISSION YOUR HONO R HAS NOT BROUGHT ANY MATERIAL ON RECORD TO ESTABLISH THAT TH E ASSESSEE HAS RECEIVED AMOUNT OF RS. 2,97,95,240/- IN RESPECT OF SALE TRANSACTION OF THE SAID LAND. MERE NON PRODUCTION OF SHRI SULT ANA MEENA, AUTOMATICALLY THE ASSESSEE DOES NOT BECOME OWNER OF THE SAID PROPERTY. THEREFORE, LIABILITY OF CAPITAL GAIN TAX CANNOT BE FIXED ON THE ASSESSEE. AS EARLIER SUBMITTED THE MAIN SOURCE OF INCOME OF THE ASSESSEE IS COMMISSION/BROKERAGE FROM ARRANGING PUR CHASE/SALE OF REAL ESTATE IN THE HANDS OF OTHER CLIENTS AND NOT I N OWN ACCOUNT. IF THE DEPARTMENT FAILS TO TRACE THE ORIGINAL PERSON, THE INCOME FROM SUCH TRANSACTION IN THE FORM OF CAPITAL GAIN CANNOT BE RECOVERED FROM THE BROKERAGE/COMMISSION AGENT. WE HOPE YOU WILL FIND THE ABOVE DETAILS/INFORMATION IN ORDER AND WE WILL BE MORE GRATEFUL TO FURNISH MORE DETAILS/INFOR MATION, IF SO REQUIRED, IMMEDIATELY. (II) THE ADDITION WAS MADE IN THE HANDS OF ASSESSEE WITH OUT BRINGING ANY EVIDENCE OR POSITIVE MATERIAL:- THE ID AO REJECTED THE EVIDENCE SUBMITTED BY ASSESS EE AND ASSESSED THE ENTIRE SALE PROCEED OF THE LAND AS INC OME OF THE ASSESSEE ON SURMISES, CONJECTURES AD SUSPICION. THE DEPARTMENT HAS NO MATERIAL TO SHOW THAT THE ASSESSEE WAS THE OWNER OF THE LAND OR THE ASSESSEE WAS BENEFICIAL OWNER OF THE ENTIRE SAL E PROCEED OF THE LAND. THE LD AO HAS NOT MADE ANY INQUIRY FROM THE W ITNESSES WHO SIGNED AS WITNESS IN POWER OF ATTORNEY AND REGISTE RED SALE DEED. THE REGISTERED SALE DEED, POWER OF ATTORNEY AND REV ENUE RECORDS UNDER RAJASTHAN LAND REVENUE ACT ARE EVIDENCE, ALL WHICH SHOWS THE OWNER OF THE LAND WAS SHRI SULTAN MEENA AND THE ASSESSEE ACTED AS AN AGENT OF PRINCIPLE. THE ASSESSING OFFICER M ERELY DISBELIEVED 6 ITA NO. 266/JP/2017 SH. GYAN CHAND AGARWAL, JAIPUR. THE EXPLANATION/STATEMENTS GIVEN BY THE ASSESSEE AN D HAS CONVERTED GOOD PROOF INTO NO PROOF. HON'BLE JUSTICE HIDAYATULLAH OF THE SUPREME COURT IN THE CASE OF SREELEKHA BENERJEE VS CIT [1963] 49 ITR 112 (SC); 120 OBSERVED THAT THE INOCM E TAX DEPARTMENT CANNOT BY MERELY REJECTING UNREASONABLY A GOOD EXPLANATION, CONVERT GOOD 'PROOF INTO NO PROOF '. HON'BLE SUPREME COURT IN THE CASE OF UMA CHARAN SHAW & BROS CO VS CIT 37 ITR 271 HAS HELD THAT THE SURMISES AND CONJECTURES, AND THE CONCLUSION IS THE RESULT OF SUSPICION WHICH CANNOT TAKE THE PLACE OF PROOF. HON'BLE PUNJAB & HARAYANA HIGH COURT IN THE CASE OF CIT VS ANUPAM KAPOOR (2008) 299 ITR 179 (P &H) ALSO HELD THAT SUSPICION, HOWSOEVER STRONG CANNOT TAKE THE PLACE OF LEGAL PROOF. (III) THE CONTENTION OF THE ID AO THAT THE STATED POWER O F ATTORNEY WAS EXECUTED ON 20/01/2007 IN WHICH THE LA ND IS SHOWN TO BE AGRICULTURAL WHEREAS THE SAID LAND STOO D CONVERTED TO RESIDENTIAL IN 2005 THE ID AO MENTIONED IN PARA 4.2 OF HIS ORDER THAT T HE POWER OF ATTORNEY DOCUMENT DATED 20/01/2007 PRODUCED BY THE ASSESSEE PERTAINED TO AGRICULTURAL LAND WHEREAS THE JDA RECO RDS SHOWED THAT VIDE ORDER DATED 16/09/2006 OF JDA, THE SAID LAND H AS BEEN CONVERTED INTO RESIDENTIAL LAND UNDER SECTION 90(B) OF THE RAJASTHAN LAND REVENUE ACT 1956. THIS FINDING HAS NO BEARING ON THE OWNERSHIP OF THE LAND AND STATUS OF THE ASSESSEE IN THE DEAL AS AGENT OF SHRI SULTAN MEENA. THE POWER OF ATTORNEY I S FOR THE SAME LAND WHICH WAS SOLD BY THE ASSESSEE AS AN AGENT OF SHRI SULTAN MEENA. THE KHASRA NOS MENTIONED IN POWER OF ATTORNE Y ARE 535, 536, 537, 538, 541, 542, 546, AND 534 (PB PAGE 41) AND THE SAME KHASRA NUMBERS ARE MENTIONED IN THE REGISTERED SALE DEED (PB PG 47). FURTHER, THIS POWER OF ATTORNEY HAS BEEN ACCEPTED B Y THE 7 ITA NO. 266/JP/2017 SH. GYAN CHAND AGARWAL, JAIPUR. REGISTRATION AUTHORITY AND ALLOWED THE ASSESSEE TO EXECUTE THE SALE DEED FOR AND ON BEHALF OF SHRI SULTAN MEENA THEN HO W THE ID AO CAN REJECT AND BRUSHED ASIDE THIS POWER OF ATTORNEY. IN THE REGISTERED SALE DEED THE STATUS OF THE ASSESSEE IS CLEARLY MEN TIONED THAT THE ASSESSEE WAS ACTING AS POWER OF ATTORNEY HOLDER OF SHRI SULATAN MEENA AND REAL AND BENEFICIAL OWNER OF THE LAND IS SHRI SULTAN MEENA. (III) PERSONAL PRESENCE OF SHRI SULTAN MEENA IT IS AN ADMITTED FACT THAT THE NOTICE ISSUED BY T HE DEPARTMENT TO SHRI SULTAN MEENA WAS SERVED. THEREFORE, THE IDENTI TY OF SHRI SULTAN MEENA IS NOT IN DOUBT. THE ASSESSEE HAS NO STATUTOR Y POWERS TO ENFORCE THE ATTENDANCE OF ANY PERSON. THE DEPARTMEN T HAS BEEN VESTED WITH VAST POWERS BY THE LEGISLATION. THE DEP ARTMENT CAN USE ITS POWERS AND MAKE NECESSARY INQUIRIES TO UNEARTH THE TRUTH. THE DEPARTMENT CAN MAKE INQUIRY FROM THE SHRI SULTAN ME ENA. IT IS THE ASSESSING OFFICER'S STATUTORY DUTY TO ENFORCE ATTEN DANCE OF A WITNESS IF THE EVIDENCE IS MATERIAL. IF POWER TO CALLED THE WITNESS AND EXAMINE HIM ARE NOT EXERCISED JUDICIALLY THAN THE A DDITION CANNOT BE MADE. RELIANCE IS PLACED ON THE FOLLOWING DECISIONS . 1) NATHU RAM PREMCHAND VS CIT (1963) 49 ITR 561 (ALL); 2) E.M.C. WORKS P LTD VS ITO (1963) 49 ITR 650 (ALL) (IV) SALE CONSIDERATION WAS RECEIVED IN CASH:- IT IS ADMITTED FACT THAT SHRI SULTAN MEENA IS AN AG RICULTURIST AND THIS ALSO PROVED FROM THE REVENUE RECORDS OF THE LAND. I T IS COMMON PRACTICE THAT THE MOST OF AGRICULTURIST RECEIVES TH E PAYMENT IN CASH. FURTHER THE LAW OF LAND DOES NOT PROHIBIT TO SALE O F THE AGRICULTURAL LAND IN CASH. 8 ITA NO. 266/JP/2017 SH. GYAN CHAND AGARWAL, JAIPUR. (V) THE ASSESSEE FAILED TO PROVE THAT THE SALE CONSIDER ATION OF RS. 2,69,37,000/- WAS PASSED TO SHRI SULTAN MEENA SINCE THE LAND IN QUESTION WAS OWNED BY SHRI SULTA N MEENA THEREFORE THE ASSESSEE COULD NOT RETAIN THE MONEY O F SHRI SULTAN MEENA, HAD THE MONEY WAS NOT GIVEN TO SHRI SULTAN M EENA, HE WOULD HAVE FILED THE COMPLAINT IN POLICE AND OTHER COURTS AGAINST THE ASSESSEE. THERE EXIST NO SUCH CASES AGAINST THE ASS ESSEE THIS ALONE PROVE THAT SHRI SULTAN MEENA HAS RECEIVED HIS MONEY AGAINST SALE OF THE LAND. THERE IS NO FINDING OF THE ID AO THAT THE ASSESSE E HAS UTILIZED THE MONEY RECEIVED FROM SALE OF LAND OWNED BY SHRI SULT AN MEENA FOR HIS BENEFIT. NO SUCH UTILIZATION WAS FOUND IN THE H ANDS OF THE ASSESSEE. EVEN FOR SAKE OF THE ARGUMENT IF IT IS PRESUMED THA T THE MONEY WAS NOT RETURNED TO SHRI SULTAN MEENA AND KEPT BY THE A SSESSEE THEN IT BECOMES LIABILITY OF THE ASSESSEE NOT HE INCOME OF THE ASSESSEE. THEREFORE ON THIS GROUND ALSO THE SALE PROCEEDS OF THE LAND CANNOT BE ASSESSED AS INCOME OF THE ASSESSEE. (VI) THE MODUS OPERANDI DISCUSSED IN PARA (VIII) AT PAGE 9 OF ASSESSMENT ORDER IS BASED ON SURMISES AND CONJECTUR ES WITHOUT HAVING MATERIAL:- THE ID AO UNDER THE GUISE OF THE MODUS OPERANDI OF THE SALE OF SC/ST LAND WANTS TO SAY THAT THE ASSESSEE WAS THE R EAL OWNER OF THE LAND WHICH HE PURCHASED UNDER AGREEMENT TO SALE AND POWER OF ATTORNEY . FIRST OF ALL THE ONUS THE ONUS WAS ON THE DEPARTMENT TO PROVE THAT THE APPARENT IS NOT REAL A ND THE SAID ONUS WAS NOT DISCHARGED. RELIANCE IS PLACED ON FOLLOWING DECISIONS:- 9 ITA NO. 266/JP/2017 SH. GYAN CHAND AGARWAL, JAIPUR. (I) SREE MEENAKSHI MILLS LTD VS CIT [1957] 31 ITR 2 8 SC; (II) CIT VS S.P. JAIN[1973] 87 ITR 370 (III) RAI BAHADUR MOHAN SINGH OBEROI VS CIT [1973] 88 ITR 53 SC, (IV) CIT VS DAULAT RAM RAWATMULL 87 ITR 349 (SC), (V) JAYANTI LAL PATEL VS ASTT CIT [1998] 233 ITR 58 8 (RAJ); FURTHER, THERE IS NO FINDING OF ID AO THAT WHEN THI S PROPERTY WAS PURCHASED BY THE ASSESSEE AND AT WHAT COST AND WHER E IS THE AGREEMENT OF SALE. IN FACT THE ID AO HAS SUSPECTED AND DRAWN AN ANALOGY. EVEN THE ID AO HIMSELF HAS NOT ACCEPTED TH IS ANALOGY IN COMPLETION OF ASSESSMENT SINCE THE COST OF THE LAND HAS NOT BEEN DEDUCTED WHILE COMPUTING THE INCOME. (IX ) POWER OF ATTORNEY EXECUTED IN FAVOUR OF ASSES SEE DOES NOT MAKE THE ASSESSEE OWNER OF THE PROPERTY THE LAND OWNER EXECUTED THE POWER OF ATTORNEY IN FA VOUR OF THE ASSESSEE. THE LAND OWNER HAS NOT TRANSFERRED THE OW NERSHIP OF THE LAND IN FAVOUR OF THE ASSESSEE. HONBLE SUPREME COURT IN THE CASE OF SURAJ LAMP AND INDUSTRIES (P.) LTD. V. STATE OF HARYANA [2012] 340 ITR 1 , HAS HELD THAT:- SCOPE OF POWER OF ATTORNEY 13. A POWER OF ATTORNEY IS NOT AN INSTRUMENT OF TRA NSFER IN REGARD TO ANY RIGHT, TITLE OR INTEREST IN AN IMMOVABLE PROPER TY. THE POWER OF ATTORNEY IS CREATION OF AN AGENCY WHEREBY THE GRANT OR AUTHORIZES THE GRANTEE TO DO THE ACTS SPECIFIED THEREIN, ON BEHALF OF GRANTOR, WHICH WHEN EXECUTED WILL BE BINDING ON THE GRANTOR AS IF DONE BY HIM (SEE SECTION 1A AND SECTION 2 OF THE POWERS OF ATTORNEY ACT, 1882). IT IS 10 ITA NO. 266/JP/2017 SH. GYAN CHAND AGARWAL, JAIPUR. REVOCABLE OR TERMINABLE AT ANY TIME UNLESS IT IS MA DE IRREVOCABLE IN A MANNER KNOWN TO LAW. EVEN AN IRREVOCABLE ATTORNEY DOES NOT HAVE THE EFFECT OF TRANSFERRING TITLE TO THE GRANTEE... (X) THE ID AO BLOWING HOT AND COLD IN SAME STREAM A S HE HIMSELF SUGGESTED ACTION IN THE CASE OF SHRI SULTAN MEENA AFTER COMPLETION OF ASSESSMENT OF THE ASSESSEE THE ID AO VIDE LETTER NO ADD.CIT/R-6/JPR/2013-14/289 DATED 15/05/2013 DIR ECTED TO ITO WARD 7(2) JAIPUR TO ASSESS THE CAPITAL GAIN ARISING FROM SALE OF THIS LAND IN THE HANDS OF SHRI SULTAN MEENA, THE OWNER O F THE LAND. THE COPY OF THE SAID LETTER IS PLACED AT PB PAGE 66 TO 67 . THIS LETTER CLEARLY SHOWS THAT THE DEPARTMENT ITSELF IS TREATIN G SHRI SULTAN MEENA AS REAL AND BENEFICIAL OWNER OF THE SALE CONS IDERATION OF THE LAND. THIS PROVES THAT THE ID AO HAS ASSESSED THE I NCOME IN THE HANDS OF THIS ASSESSEE MERELY ON SUSPICION, SURMISE S AND CONJECTURES AND WITHOUT HAVING MATERIAL. (XI) HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS SHR I C SUGUMARAN TAX CASE (APPEAL) NO 840 OF 2014 ORDER DA TED 03-11-2014 {2014 (11) TMI 320) HAS CONSIDERED THE I SSUE OF TAXABILITY IN THE HANDS OF POWER OF ATTORNEY HOL DER. IN THIS CASE THE ASSESSING OFFICER TOOK THE VIEW THAT IT IS THE ASSESSEE (THE POWER OF ATTORNEY HOLDER) SOLD THE PR OPERTY. THE ASSESSEE/POWER OF ATTORNEY HOLDER CONTESTED THE ASS ESSMENT OF CAPITAL GAINS AT HIS HANDS BY PLEADING THAT HE HAD ACTED ONLY AS A POWER OF ATTORNEY HOLDER OF THE ACTUAL OWNER MR.VIS WANATHAN, WHICH PLEA WAS REJECTED BY THE ASSESSING OFFICER AND THE TOTAL INCOME WAS COMPUTED AT 61,25,290/- RESULTING IN THE DEMAND O F TAX AT 16,94,560/-. AGGRIEVED BY THE SAID ORDER OF THE ASS ESSING OFFICER, THE ASSESSEE HAS FILED AN APPEAL BEFORE THE COMMISS IONER OF INCOME TAX (APPEALS), WHO REJECTED THE PLEA OF THE ASSESSE E, THEREBY 11 ITA NO. 266/JP/2017 SH. GYAN CHAND AGARWAL, JAIPUR. DISMISSED THE APPEAL. AS AGAINST THE SAID ORDER, TH E ASSESSEE FILED AN APPEAL BEFORE THE INCOME TAX APPELLATE TRIBUNAL. THE TRIBUNAL PLACING RELIANCE ON THE VARIOUS CLAUSES IN THE POWE R OF ATTORNEY, HELD THAT THE RECITAL CONTAINED IN THE POWER OF ATTORNEY DOES NOT SHOW THAT ANY CONSIDERATION WAS PAID TO THE ACTUAL OWNER AND THE ASSESSEE HAD ACTED MERELY AS AN AGENT. THE TRIBUNAL ALSO GAVE A FINDING THAT THERE WAS NO SUPPORTING EVIDENCE TO DI SBELIEVE THE CLAIM OF THE ASSESSEE. THE TRIBUNAL WAS OF THE VIEW THAT THE ASSESSEE COULD NOT BE TREATED AS OWNER OF THE PROPERTY SOLD ON 23.10.2008 AND THEREFORE THERE WAS NO QUESTION OF COMPUTING CA PITAL GAINS IN THE HANDS OF THE ASSESSEE. ACCORDINGLY, THE TRIBUNA L ALLOWED THE APPEAL FILED BY THE ASSESEE. AS AGAINST THE SAID OR DER OF THE TRIBUNAL, THE REVENUE FILED APPEAL BEFORE HONBLE H IGH COURT. HONBLE HIGH COURT CONFIRMED THE ORDER OF TRIBUNAL. THE RELEVANT FINDING OF HONBLE HIGH COURT IS AS UNDER:- 11. IN THE PRESENT CASE WE FIND THAT THERE IS NO T RANSFER TO OR ENABLING ENJOYMENT OF PROPERTY IN FAVOUR OF THE ASS ESSEE IN ANY MANNER AND THEREFORE, SUB-CLAUSE (VI) OF SECTION 2( 47) OF THE INCOME TAX ACT DOES NOT GET ATTRACTED. CLAUSE 21 OF THE POWER OF ATTORNEY, WHICH HAS BEEN ALREADY REFERRED TO SUP RA, CLEARLY REVEALS THAT NO CONSIDERATION WAS RECEIVED FROM THE POWER AGENT FOR APPOINTING HIM AS POWER OF ATTORNEY. IT A LSO EMPHASISED THEREIN THAT THE PROPERTY RIGHT HAS NOT BEEN HANDED OVER TO THE POWER AGENT. WE ARE, THEREFORE, UNABLE TO ACCEPT THE PLEA OF THE REVENUE THAT THERE WAS AN ELEMENT O F TRANSFER OR ENABLING ENJOYMENT IN FAVOUR OF THE ASSESSEE. TH E LETTER OF THE LAND OWNER SUBSEQUENTLY ISSUED DOES NOT COME TO THE AID OF THE DEPARTMENT. IT IS THE DUTY OF THE POWER OF ATTO RNEY HOLDER TO DELIVER THE AMOUNT RECEIVED FOR THE PURPOSE OF T RANSFER OF PROPERTY. THEREFORE, NO FAULT COULD BE FOUND ON THE PART OF THE ASSESSEE. ASSUMING THAT HE HAD DELIVERED CERTAIN SU M TO THE 12 ITA NO. 266/JP/2017 SH. GYAN CHAND AGARWAL, JAIPUR. LAND OWNER, IT IS BUT THE LAWFUL DUTY OF THE POWER OF ATTORNEY TO DELIVER PAYMENT TO THE LAND OWNER. THE SALE TO DR.M EERA BAI IS ALSO FOR THE SAME VALUE. HENCE, NOTHING TURNS ON TH E LETTER OF THE ERSTWHILE OWNER, IN FAVOUR OF THE DEPARTMENT. 12. WE, THEREFORE, NOW PROCEED TO ANALYSE THE MEANI NG BEHIND CIRCULAR NO.495 DATED 22.9.1987. THE INTERPRETATION OF THE CIRCULAR AS PUT FORWARD BY SRI.T.RAVIKUMAR, LEARNED STANDING COUNSEL APPEARING FOR THE REVENUE, WE ARE NOT IN AG REEMENT. THE PROVISIONS OF SUB-CLAUSE (VI) OF SECTION 2(47) OF THE INCOME TAX ACT MAKE IT CLEAR THAT THE TRANSACTION, WHICH H AS THE EFFECT OF TRANSFERRING OR ENABLING THE ENJOYMENT OF IMMOVA BLE PROPERTY ALONE WOULD COME WITHIN THE AMBIT OF TRANSFER. THE CIRCULAR READS SOMETHING MORE INTO THE PROVISION. WE ARE NOT INCLINED TO ACCEPT SUCH AN INTERPRETATION. THE CIRCULAR ALSO ST ATES THAT THE LEGAL OWNERSHIP WOULD CONTINUE WITH THE TRANSFEROR; BUT THE PROPERTY RIGHTS IF IT IS TRANSFERRED BY WAY OF POWE R OF ATTORNEY WOULD COME WITHIN THE AMBIT OF SUB-CLAUSE (VI) OF S ECTION 2(47) OF THE INCOME TAX ACT. ASSUMING WE ACCEPT THE INTEN TION BEHIND THE CIRCULAR, THEN THERE SHOULD BE AN ELEMEN T OF TRANSFER OR ENABLING ENJOYMENT OF PROPERTY RIGHT AS STATED I N PARAGRAPH 11.2 OF THE CIRCULAR BY THE POWER OF ATTORNEY HOLDE R. 13. WE FIND NO SUCH RECITAL IN THE POWER OF ATTORNE Y AS EXTRACTED BY THE TRIBUNAL AND REFERRED TO BY US. ON THE CONTR ARY, THE TERMS OF THE POWER OF ATTORNEY CLEARLY SHOW THAT PR OPERTY RIGHTS HAS NOT BEEN TRANSFERRED TO THE POWER OF ATTORNEY H OLDER AND THERE IS ALSO NO PROVISION FOR ENABLING ENJOYMENT. IT IS NOT THE CASE OF THE DEPARTMENT THAT THE POWER OF ATTORNEY I S SHAM. IF THEY ACCEPT THE POWER OF ATTORNEY IS VALID, THEN TH E PLEA OF CAPITAL GAINS AT THE HANDS OF THE ASSESSEE HAS NO L EGS TO STAND. ACCORDINGLY, WE FIND NO MERITS IN THIS TAX CASE(APP EAL). 13 ITA NO. 266/JP/2017 SH. GYAN CHAND AGARWAL, JAIPUR. (XII) ON THE SIMILAR FACTS AND CIRCUMSTANCES COORDI NATING BENCH OF HONBLE ITAT JAIPUR HAS DECIDED THE ISSUE IN THE CASE OF SHRI SURAJ NARAIN KHATORIA, VS. INCOME TAX OFFICER ITA N O 1043/JP/2011 AY 2008-09 ORDER DATED 27-05-2013 IN FAVOUR OF ASSESSEE. THE FINDINGS OF HONBLE ITAT IN THIS CASE WAS AS UNDER:- 11. WE HAVE HEARD PARTIES WITH REFERENCE TO MATERI AL ON RECORD. SHRI BHARAT SINGH, S/O- SHRI MOTI SINGH AND SHRI VIJAY PAL SINGH, S/O- SHRI BHARAT SINGH CHOUDHARY BY A REGIST ERED POWER OF ATTORNEY DATED 13/11/2006 APPOINTED SHRI SURAJ N ARAYAN, SON OF SHRI NARAIN SINGH KHATORIA AS THEIR POWER OF ATT ORNEY IN RESPECT OF 0.30 HECT. OF AGRICULTURAL LAND SITUATED IN KHASRA NO. 13 AT VILLAGE BHAKROTA FOR GETTING THE REVENUE RECO RD CORRECTED IN THAT RESPECT AND AFTER GETTING ITS MUTATION IN T HEIR NAME, SELL THIS LAND TO ANY PERSON ON THEIR BEHALF AND HIS ACT S WERE BINDING ON THEM. THE SAID POWER OF ATTORNEY WAS EXECUTED ON NON- JUDICIAL STAMP PAPER OF RS. 500/-. HOWEVER, THE REG ISTERING AUTHORITY ADOPTED VALUE AT RS. 13.80 LACS AND FOR S TAMP DUTY PURPOSES AND CHARGED STAMP DUTY OF RS. 27,600/- THE REON. THE SAID POWER OF ATTORNEY IS FOUND LAID ON RECORD AT A SSESSEES PAPER BOOK PAGES 22-23. 12. THE ADMITTED FACT IS THAT THE APPELLANT AFTER C ORRECTION OF REVENUE RECORD AND RECORDING THE SAID LAND MEASURING 0.30 HECT. IN THE NAME OF SHRI BHARAT SINGH AND SHRI VIJAY PAL SINGH, SOLD THE SAM E TO SMT. RADHA DEVI KHATORIA VIDE SALE DEED DATED 19/12/2007 PLACED AT ASSESSEES PAPER BOOK PAGES 49 TO 54. THE SAID SALE DEED HAS BEEN EXECUTED BY THE APPELLANT IN HIS CAPACITY AS A POWER OF ATTORNEY OF SHRI BHARAT SINGH AND SHRI VIJAY PAL SI NGH FOR A SALE CONSIDERATION OF RS. 4.11 LACS. SMT. RADHA DEVI KHA TORIA 14 ITA NO. 266/JP/2017 SH. GYAN CHAND AGARWAL, JAIPUR. HAPPENS TO BE WIFE OF THE APPELLANT. THE ENQUIRIES CONDUCTED BY THE ASSESSING OFFICER REVEALS THAT SHRI SURAJ NARAI N KHATORIA, THE APPELLANT HAS NOT RETURNED OR MADE PAYMENT OF THE A FORESAID SALE CONSIDERATION OF RS. 4.11 LACS TO SHRI BHARAT SINGH AND SHRI VIJAY PAL SINGH AS THE SAME IS STATED TO HAVE BEEN DENIED CATEGORICALLY BY THEM, BUT APPELLANTS CASE IS THAT THE SAID PAYMENT STOOD MADE TO SMT. MANJU YADAV AS IS EVIDEN CED BY THE SALE DEED EXECUTED BY THE APPELLANT. FOR SUCH A CONTROVERSY, THE REMEDY LIES SOMEWHERE ELSE. THE SU B- REGISTRAR, IN THIS CASE HAS ADOPTED VALUE OF THIS P ROPERTY AT RS. 42 LACS FOR STAMP DUTY PURPOSES, WHICH HAS BEEN TRE ATED AS SALE CONSIDERATION BY THE ASSESSING OFFICER. 13. PERUSAL OF THE SALE DEED DATED 19/12/2007 AT PA GE 50 OF THE ASSESSEES PAPER BOOK, IT IS REVEALED THAT SAID SHR I SURAJ NARAIN DID NOT EXECUTE THE SALE DEED AS AN OWNER OF THE AF ORESAID LAND MEASURING 0.30 HECT.. HE EXECUTED SALE DEED IN HIS CAPACITY AS A POWER OF ATTORNEY HOLDER ONLY WHEREIN HE HAD ONLY A DELEGATED RIGHT. THIS RIGHT WAS NOT INDEPENDENT RIG HT OF THE APPELLANT. THERE IS ALSO NO RELIABLE MATERIAL OR DO CUMENTARY EVIDENCE ON RECORD TO SHOW THAT THE SAID SHRI SURAJ NARAIN, THE APPELLANT BEFORE US HAD PURCHASED THE AFORESAID LAN D FROM ANY OF ITS EARLIER OWNERS BEFORE TRANSFERRING THE SAME IN THE NAME OF SMT. RADHA DEVI KHATORIA THROUGH SALE DEED DATED 19 /12/2007 AS A POWER OF ATTORNEY HOLDER. IT IS A DIFFERENT MA TTER THAT THE SALE CONSIDERATION RECEIVED BY HIM ON BEHALF OF THE PREVIOUS OWNERS WAS NOT PAID OR RETURNED TO THEM IMMEDIATELY AFTER EXECUTION OF SALE DEED OR EVEN UP TO THE TIME OF EN QUIRIES MADE BY THE ASSESSING OFFICER. THE APPELLANT, THUS, BEIN G NEITHER OWNER NOR A DEEMED OWNER OF THE SAID CAPITAL ASSET, THE SAID CAPITAL ASSET CANNOT BE TAKEN AS PROPERTY OF THE AP PELLANT. THE 15 ITA NO. 266/JP/2017 SH. GYAN CHAND AGARWAL, JAIPUR. SALE CONSIDERATION OF THE AFORESAID LAND, THEREFORE , COULD NOT BE A SUBJECT MATTER OF TRANSFER OF HIS OWN CAPITAL ASS ET. THE INCOME TAX DEPARTMENT HAS ALSO NOT ASSESSED HIM AS A REPRESENTATIVE ASSESSEE OR AN AGENT OF THE SAID SHR I BHARAT SINGH AND SHRI VIJAY PAL SINGH AND AS SUCH QUESTION OF MAKING ASSESSMENT OF INCOME FROM CAPITAL GAINS BY APPLICAT ION OF PROVISIONS OF SECTION 50-C OF THE ACT ADOPTING FULL VALUE OF CONSIDERATION AT RS. 42 LACS IN HIS HANDS, IS NEITH ER JUSTIFIED NOR CALLED FOR. THE AUTHORITIES BELOW, THEREFORE, HAVE ERRED IN BRINGING TO TAX THE INCOME FROM CAPITAL GAINS IN HI S HAND THOUGH THE SAME MAY BE A SUBJECT MATTER OF TAXATION IN THE HANDS OF THE REAL OWNERS. IN THIS VIEW OF THE MATTER, THE AD DITION SO MADE BEING UNJUST AND UNCALLED FOR, THE SAME IS DIR ECTED TO BE DELETED. THEREFORE, LIABILITY OF TAX CANNOT BE FIXED ON THE ASSESSEE AND THE INCOME FROM THE SALE OF LAND CANNOT BE ADDED IN THE ASSESS EE'S INCOME. THE HUMBLE ASSESSEE PRAYS YOUR HONOR KINDLY SET ASIDE THE ORDE RS OF LOWER AUTHORITIES AND DELETE THE ADDITION MADE BY LD AO AND CONFIRMED BY LD CIT(A). 4.1 ON THE CONTRARY, LD. DEPARTMENTAL REPRESENTATIV ES OPPOSED THE SUBMISSIONS AND SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 4.2 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDER OF THE AUTHORITIES BELOW . THE LD. CIT(A) HAS DECIDED THIS ISSUE BY HOLDING AS UNDER:- 6.3 I HAVE GONE THROUGH THE ASSESSMENT ORDER, STAT EMENT OF FACTS, GROUNDS OF APPEAL AND WRITTEN SUBMISSION CAREFULLY. IT IS SEE N THAT THE APPELLANT HAD OBTAINED POWER OF ATTORNEY FROM SHRI SULTAN MEENA ON 20.01.2 007. THE POWER OF ATTORNEY WAS FOR THE AGRICULTURE LAND OWNED BY SHRI SULTAN M EENA BUT THE SAID LAND WAS ALREADY CONVERTED AS RESIDENTIAL LAND IN 2005. THE APPELLANT HAS NOT PRODUCED SHRI SULTAN MEENA TO PROVE THAT THE SALE WAS AFFECTED BY THE APPELLANT ONLY ON BEHALF OF 16 ITA NO. 266/JP/2017 SH. GYAN CHAND AGARWAL, JAIPUR. SHRI SULTAN MEENA AND THE SALE CONSIDERATION RECEIV ED BY HIM AS POWER OF ATTORNEY HOLDER WAS HANDED OVER TO SHRI SULTAN MEENA. THERE IS NO OTHER EVIDENCE TO SUBSTANTIATE THE CONTENTION OF THE APPELLANT THAT T HE SALES CONSIDERATION VIEW THAT NO PRUDENT PERSON WILL EXECUTE POWER OF ATTORNEY IN FA VOUR OF ANY UNKNOWN PERSON UNLESS HE RECEIVES THE APPROPRIATE CONSIDERATION FO R GIVING THE POWER OF ATTORNEY. SHRI SULTAN MEENA HAS NOT SHOWN THE SALE TRANSACTIO N EFFECTED BY THE APPELLANT AS POWER OF ATTORNEY HOLDER OF SHRI SULTAN MEENA, IN H IS RETURN OF INCOME, IF ANY, FILED BY HIM, WHICH ALSO SHOWS THAT THE SALE WAS EFFECTED BY THE APPELLANT FOR HIMSELF ONLY AND THE CONSIDERATION FOR OBTAINING THE POWER OF AT TORNEY IN HIS FAVOUR WAS ALREADY PAID BY HIM TO SHRI SULTAN MEENA AT THE TIME OF OBT AINING THE POWER OF ATTORNEY IN HIS FAVOUR. HENCE, I AM OF THE VIEW THAT THE INCOM E OF RS. 269,37,000/- IS THE INCOME OF THE APPELLANT AND THE AO HAS RIGHTLY TAXE D THE INCOME IN THE HANDS OF THE APPELLANT. ACCORDINGLY, THE ADDITION OF RS. 2,69,7 3,000/- MADE BY THE AO IS CONFIRMED. THE GROUND OF APPEAL IS DISMISSED. 4.3 THE ONLY ISSUE IN THIS GROUND IS WHETHER THE SA LE CONSIDERATION OF THE LAND BELONGING TO SHRI SULTAN MEENA CAN BE TAXED IN THE HANDS OF THE ASSESSEE, WHO IS ADMITTEDLY POWER OF ATTORNEY HOLDER OF SHRI SULTAN MEENA. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT, SHRI SULTAN MEENA IS RECOR DED OWNER IN THE LAND IN QUESTION. THERE IS ALSO NO DISPUTE WITH REGARD TO THE FACT TH AT, THERE IS NO EVIDENCE ON RECORD SUGGESTING THAT THE POWER OF ATTORNEY TO SHRI SULTA N MEENA WAS EXECUTED BY THE ASSESSEE BY PAYING CONSIDERATION OF THE LAND. THE AUTHORITIES BELOW DOUBTED ABOUT THE TRANSACTION ON THE BASIS THAT THE ASSESSEE FAIL ED TO PRODUCE SHRI SULTAN MEENA TO PROVE THAT THE SALE CONSIDERATION SO RECEIVED WAS H ANDED OVER TO THE SAID SHRI SULTAN MEENA AND ALSO IN THE ABSENCE OF ANY RECEIPT BY THE OWNER OF THE LAND, STATING THAT THE ASSESSEE ACTED MERELY AN AGENT. AD MITTEDLY, THE REVENUE HAS NOT BROUGHT OUT ANY MATERIAL SUGGESTING THAT THE ASSESS EE RECEIVED THIS CONSIDERATION AS THE OWNER OF THE LAND. AS PER THE SALE DEED ENCLOS ED AT PAGE 46 OF THE PAPER BOOK, 17 ITA NO. 266/JP/2017 SH. GYAN CHAND AGARWAL, JAIPUR. IT IS STATED THAT THE OWNER OF THE LAND WISHED TO S ALE THE LAND FOR PERSONAL AND FAMILY NEEDS. IT IS RECORDED IN THE SALE DEED THAT THE AT TORNEY HOLDER RECEIVED A SUM OF RS. 269,37,000/- AS A POWER OF ATTORNEY OF THE OWNER OF THE LAND. THIS FACT IS REMAINED UNDISPUTED. 4.4 WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO T HE FACTS OF THE PRESENT CASE EVEN IF IT IS ASSUMED THAT THE ASSESSEE HAS RECEIVE D MONEY AND NOT HANDED OVER THE SAME TO THE LAND OWNER SUCH RECEIPT IS A LIABILITY NOT AN INCOME SO FAR THE ASSESSEE IS CONCERNED. SINCE, THE REVENUE HAS NOT BROUGHT A NY MATERIAL ON RECORD SUGGESTING THAT THIS POWER OF ATTORNEY WAS EXECUTED IN LIEU OF A CONSIDERATION. IN THE ABSENCE OF SUCH MATERIAL, PURELY, ON THE BASIS OF PRESUMPTION AND SUSPICION TAX LIABILITY CANNOT BE FASTENED ON SUCH RECEIPT ON THE ASSESSEE. DURING THE COURSE OF HEARING LD. COUNSEL FOR THE ASSESSEE HAS PLACED REL IANCE ON THE JUDGMENT OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF COMMISSION ER OF INCOME TAX VS. C. SUGUMARAN, DATED 3/11/2014 IN TAX CASE (APPEAL) NO. 840 OF 2014. THE HONBLE HIGH COURT, UNDER THE IDENTICAL FACTS DECIDED THE I SSUE OF TAX LIABILITY QUA THE ATTORNEY HOLDER AS UNDER:- 12. WE, THEREFORE, NOW PROCEED TO ANALYSE THE MEA NING BEHIND CIRCULAR NO. 495 DATED 22.9.1987. THE INTERPRETATION OF THE CIRCULAR AS PUT FORWARD BY SRI T. RAVIKUMAR, LD. STANDING COUNSEL APPEARING FO R THE REVENUE, WE ARE NOT IN AGREEMENT. THE PROVISIONS OF SUB-CLAUSE (VI) OF SECTION 2(47) OF THE INCOME TAX ACT MAKE IT CLEAR THAT THE TRANSACTION, WHICH HAS THE EFFECT OF TRANSFERRING OR ENABLING THE ENJOYMENT OF IMMOVABLE PROPERTY ALONE WOULD COME WITHIN THE AMBIT OF TRANSFER. THE CIRCULAR RE ADS SOMETHING MORE INTO THE PROVISIONS. WE ARE NOT INCLINED TO ACCEPT SUCH AN INTERPRETATION. THE CIRCULAR ALSO STATES THAT THE LEGAL OWNERSHIP WOULD CONTINUE WITH THE TRANSFEROR, BUT THE PROPERTY RIGHTS IT IS TRANSFERR ED BY WAY OF POWER OF 18 ITA NO. 266/JP/2017 SH. GYAN CHAND AGARWAL, JAIPUR. ATTORNEY WOULD COME WITHIN THE AMBIT OF SUB-CLAUSE (VI) OF SECTION 2(47) OF THE INCOME TAX ACT. ASSUMING WE ACCEPT THE INTENTI ON BEHIND THE CIRCULAR, THEN THERE SHOULD BE AN ELEMENT OF TRANSFER OR ENAB LING ENJOYING OF PROPERTY RIGHT A STATED IN PARAGRAPH 11.2 OF THE CIRCULAR BY THE POWER OF ATTORNEY HOLDER. 13. WE FIND NO SUCH RECITAL IN THE POWER OF ATTORNE Y AS EXTRACTED BY THE TRIBUNAL AND REFERRED TO BY US. ON THE CONTRARY, T HE TERMS OF THE POWER OF ATTORNEY CLEARLY SHOW THAT PROPERTY RIGHTS HAS NOT BEEN TRANSFERRED TO THE POWER OF ATTORNEY HOLDER AND THERE IS ALSO NO PROVI SION FOR ENABLING ENJOYMENT. IT IS NOT THE CASE OF THE DEPARTMENT TH AT THE POWER OF ATTORNEY IS SHAM. IF THEY ACCEPT THE POWER OF ATTORNEY IS VALI D, THEN THE PLEA OF CAPITAL GAINS THAT THE HANDS OF THE ASSESSEE HAS NO LEGS TO STAND. ACCORDINGLY, WE FIND NO MERITS IN THIS TAX CASE (APPEAL). THE REVENUE HAS NOT BROUGHT ANY CONTRARY BINDING PR ECEDENTS. THE ASSESSEE HAS ALSO PLACED RELIANCE ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF RAMBHAU NAMDEO GAJRE V. NARAYAN BAPUJI DHOTRA [2004 (8) SCC 614], WHEREIN THE HONBLE SUPREME COURT HAS HELD THAT A POWER OF ATTO RNEY IS NOT AN INSTRUMENT OF TRANSFER IN REGARD TO ANY RIGHT, TITLE OR INTEREST IN ANY IMMOVABLE PROPERTY. THE POWER OF ATTORNEY IS A CREATION OF AN AGENCY WHEREB Y THE GRANTOR AUTHORIZES THE GRANTEE TO DO ACTS SPECIFIED THEREIN, ON BEHALF OF GRANTOR, WHICH WHEN EXECUTED WILL BE BINDING ON THE GRANTOR AS IF DONE AND BY HIM. THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE O F SHRI SURAJ NARAIN VS. ITO IN ITA NO. 1043/JP/2011, UNDER THE IDENTICAL FACTS DECIDED THE SIMILAR ISSUE AS UNDER:- 12. THE ADMITTED FACT IS THAT THE APPELLANT AFTER CORRECTION OF REVENUE RECORD AND RECORDING THE SAID LAND MEASURING 0.30 H ECT. IN THE NAME OF SHRI BHARAT SINGH AND SHRI VIJAY PAL SINGH, SOLD THE SAM E TO SMT. RADHA KHATORIA VIDE SALE DEED DATED 19/12/2007 PLACED AT ASSESSEE S PAPER BOOK PAGES 49 TO 19 ITA NO. 266/JP/2017 SH. GYAN CHAND AGARWAL, JAIPUR. 54. THE SAID SALE DEED HAS BEEN EXECUTED BY THE AP PELLANT IN HIS CAPACITY AS A POWER OF ATTORNEY OF SHRI BHARATE SINGH AND SHRI VIJAY PAL SINGH FOR ASALE CONSIDERATION OF RS. 4.11 LACS. SMT. RADHA DEVI KH ATORIA HAPPENS TO BE WIFE OF THE APPELLANT. THE ENQUIRIES CONDUCTED BY THE A O REVEALS THAT SHRI SURAJ NARAIN KHATORIA, THE APPELLANT HAS NOT RETURNED OR MADE PAYMENT OF THE AFORESAID SALE CONSIDERATION OF RS. 4.11 LACS TO SH RI BHARATE SINGH AND SHRI VIJAY PAL SINGH AS THE SAME IS STATED TO HAVE BEEN DENIED CATEGORICALLY BY THEM, BUT APPELLANTS CAE IS THAT THE SAID PAYMENT STOOD MADE TO SMT. MANJU YADAV AS IS EVIDENCED BY THE SALE DEED EXECUTED BY THE APPELLANT. FOR SUCH A CONTROVERSY, THE REMEDY LIES SOMEWHERE ELSE. THE S UB-REGISTRAR, IN THIS CASE HAS ADOPTED VALUE OF THIS PROPERTY AT RS. 42 LACS F OR STAMP DUTY PURPOSES, WHICH HAS BEEN TREATED AS SALE CONSIDERATION BY THE AO. 13. PERUSAL OF THE SALE DEED DATED 19/12/2007 AT PA GE 50 OF THE ASSESSEES PAPER BOOK, IT IS REVEALED THAT SAID SHR I SURAJ NARAIN DID NOT EXECUTE THE SALE DEED AS AN OWNER OF THE AFORESAID LAND MEASURING 0.30 HECT. HE EXECUTED SALE DEED IN HIS CAPACITY AS A POWER OF ATTORNEY HOLDER ONLY WHEREIN HE HAD ONLY A DELEGATED RIGHT. THIS RIGHT WAS NOT INDEPENDENT RIGHT OF THE APPELLANT. THERE IS ALSO NO RELIABLE MATERI AL OR DOCUMENTARY EVIDENCE ON RECORD TO SHOW THAT THE SAID SHRI SURJA NARAIN, THE APPELLANT BEFORE S HAD PURCHASED THE AFORESAID LAND FROM ANY OF ITS EARLIE R OWNERS BEFORE TRANSFERRING THE SAME IN THE NAME OF SMT. RADHA DEV I KHATORIA THROUGH SALE DEED DATED 19/12/2007 AS A POWER OF ATTORNEY HOLDER . IT IS A DIFFERENT MATTER THAT THE SAKE CONSIDERATION RECEIVED BY HIM ON BEHA LF OF THE PREVIOUS OWNERS WAS NOT PAID OR RETURNED TO THEM IMMEDIATELY AFTER EXECUTION OF SALE DEED OR EVEN UP TO THE TIME OF ENQUIRIES MADE BY THE AO. T HE APPELLANT, THUS, BEING NEITHER OWNER NOR A DEEMED OWNER OF THE SAID CAPITA L ASSET, THE SAID CAPITAL ASSET CANNOT BE TAKEN AS PROPERTY O THE APPELLANT. THE SALE CONSIDERATION OF THE AFORESAID LAND, THEREFORE, COULD NOT BE A SUBJE CT MATTER OF TRANSFER OF HI OWN CAPITAL ASSET. THE INCOME TAX DEPARTMENT HAS A LSO NOT ASSESSED HIM AS REPRESENTATIVES ASSESSEE OR AN AGENT OF THE SAID SH RI BHARAT SINGH AND SHRI VIJAY PAL SINGH AND AS SUCH QUESTION OF MAKING ASSE SSMENT OF INCOME FROM 20 ITA NO. 266/JP/2017 SH. GYAN CHAND AGARWAL, JAIPUR. CAPITAL GAINS BY APPLICATION OF PROVISIONS OF SECTI ON 50-C OF THE ACT ADOPTING HE FULL VALUE OF CONSIDERATION OF RS. 42 LACS IN HI S HANDS, IS NEITHER JUSTIFIED NOR CALLED FOR. THE AUTHORITIES BELOW, THEREFORE, HAVE ERRED IN BRINGING TO TAX THE INCOME FROM CAPITAL GAINS IN HIS HAND THOUGH TH E SAME MAY BE A SUBJECT MATTER OF TAXATION IN THE HANDS OF THE REAL OWNERS. IN THIS VIEW OF THE MATER, THE ADDITION SO MADE BEING UNJUST AND UNCALLED FOR, THE SAME IS DIRECTED TO BE DELETED. 4.5 IN VIEW OF THE ABOVE BINDING PRECEDENTS, ON THE ISSUE UNDER CONSIDERATION. WE ARE UNABLE TO SUSTAIN THE FINDING OF THE LD. CIT (A). HENCE, THE AO IS DIRECTED TO DELETE THE ADDITION HOWEVER, HE IS FREE TO TAKE ACT ION AGAINST THE REAL OWNERS AS PER LAW. THE GROUND NO. 2 OF THE ASSESSEES APPEAL IS ALLOWED. 5. NOW, WE TAKE UP GROUND NO. 1, I.E. AGAINST TREA TING THE INCOME OF RS. 7,50,000/- AS UNDER THE HEAD AS INCOME FROM OTHER SOURCES AS AGAINST THE RECEIPTS EARNED FROM BROKERAGE INCOME AND DECLARED UNDER THE HEAD OF BUSINESS & PROFESSION AND DISALLOWING THE EXPENSES THEREON CL AIMED AT RS. 1,76,583/- CLAIMED TO HAVE BEEN INCURRED ON BUSINESS RECEIPTS. 5.1 THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN SUBMISSION. THE LD. COUNSEL SUBMITTED THAT THE ASSESSEE IS MAINTAINING PROPER BOOK OF ACCOUNTS. THE BOOKS OF ACCOUNTS ARE NOT REJECTED. THE ASSESSEE HAS GIVEN THE COMPLETE DETAILS ON THE INDIVIDUALS FROM WHOM HE HAD CHARGED BROKERAGE COMMISSION. THE AO HAS REJECTED THE CLAIM ON THE G ROUND THAT SPECIFIC PARTICULAR OF LAND WAS NOT GIVEN AND PAYMENTS RECEIVED IN CASH AR E NOT VERIFIABLE. LD. COUNSEL SUBMITTED THAT THE ASSESSEE HAD GIVEN ALL THE INFOR MATION WITH REGARD TO THE LOCATION OF LAND UNDER TRANSACTION AND THE NAME OF TRANSACTI NG PARTIES. IT WAS SUBMITTED 21 ITA NO. 266/JP/2017 SH. GYAN CHAND AGARWAL, JAIPUR. BEFORE THE AO THAT ENQUIRIES FROM STATE LAND REVENU E AUTHORITIES OF THE CONCERNED AREA COULD BE MADE TO ASCERTAIN OWNERSHIP OF LAND I N THAT LOCALITY DURING THE RELEVANT PERIOD. HE SUBMITTED THAT, THE ASSESSEE H AS BEEN WORKING IN THE FIELD OF REAL ESTATE FROM PAST MANY YEARS AND DECLARING INCO ME FROM BROKERAGE AND COMMISSION FROM SUCH BUSINESS WHICH HAS BEEN DULY A CCEPTED BY THE DEPARTMENT AND THE ASSESSMENT WAS MADE U/S 143(3) IN RESPECT O F THE AY 2008-09 & 09-10. 5.2 ON THE CONTRARY, THE LD. DEPARTMENTAL REPRESENT ATIVES OPPOSED THE SUBMISSIONS AND SUBMITTED THAT THE AO OBSERVED THAT THE ASSESSEE HAS CLAIMED INCOME OF BROKERAGE. HE HAD SIMPLY GIVEN THE NAME OF THE PERSONS, NO OTHER DETAILS WERE GIVEN BY THE ASSESSEE. UNDER THESE FA CTS, THE AO WAS JUSTIFIED IN REJECTING THE CLAIM OF EARNING OF INCOME FROM BROKE RAGE. 5.3 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD. WE FIND THAT, THERE IS NO DISPUTE WITH REGA RD TO THE FACT THAT ASSESSEE HAS BEEN DECLARING FROM BROKERAGE/ COMMISSIONER ON SALE OF LAND. DURING THE YEAR UNDER CONSIDERATION THE CLAIM OF THE ASSESSEE WAS R EJECTED ON THE GROUND THAT THE ASSESSEE FAILED TO PROVE WITH ANY COGENT EVIDENCE T HAT HE ACTUALLY CARRIED OUT SUCH BUSINESS SINCE THE RECEIPT ARE IN CASH NO TDS HAS B EEN MADE BY THE PAYER. 5.4 WE FIND THAT THE ASSESSEE HAS GIVEN DETAILS OF THE PERSONS FROM WHOM HE RECEIVED BROKERAGE INCLUDING ONE SHRI SULTAN MEENA IN RESPECT OF WHOM THE ASSESSEE HAD ACTED AS POWER OF ATTORNEY HOLDER. TH E FACTS ARE IDENTICAL AS WERE IN THE EARLIER YEARS; THE ASSESSEE HAS PLACED COPY OF THE ASSESSMENT ORDER PERTAINING TO THE AY 2008-09 AND 2009-10 IN THE PAPER BOOK PAG E NO. 68 TO 72, BOTH THE YEARS, THE ASSESSEE HAS SHOWN INCOME FROM BROKERAGE . IN BOTH THE YEARS THE INCOME OF THE ASSESSEE IN RESPECT OF BROKERAGE IS A CCEPTED BY THE DEPARTMENT, WE 22 ITA NO. 266/JP/2017 SH. GYAN CHAND AGARWAL, JAIPUR. FIND THAT AO HAS NOT MADE ANY INQUIRY FROM THE PERS ONS FROM WHOM THE ASSESSEE HAD RECEIVED BROKERAGE/COMMISSION. UNDER THESE FAC TS, THE AO WAS NOT JUSTIFIED IN REJECTING THE CLAIM OF THE ASSESSEE OF EARNING BROK ERAGE/COMMISSION. THEREFORE, WE DIRECT THE AO TO TREAT THE SAME AS BUSINESS RECEIPT OF THE ASSESSEE AND ALLOW THE EXPENDITURE MADE THEREON. HENCE, WE DELETED THE AD DITION MADE BY THE AO BY TREATING THE BROKERAGE RECEIPTS AS INCOME FROM OTHE R SOURCES AND DISALLOWING THE EXPENDITURE INCURRED THEREON. HENCE, THE NET PROFI T DECLARED AT RS. 5,77,816.65 BE TREATED AS NET PROFIT FROM BUSINESS OF BROKERAGE. THUS, THIS GROUND OF ASSESSEES APPEAL IS ALSO ALLOWED. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO. 266/JP/2017 IS ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON MONDAY, THE 10 TH DAY OF JULY 2017. SD/- SD/- ( HKKXPUN ( DQY HKKJR ) ( BHAGCHAND) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED: 10 /07/2017 POOJA/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- SH. GYAN CHAND AGARWAL, JAIPUR. 2. THE RESPONDENT THE ADDL. CIT, CIRLCE-6, JAIPUR . 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 266/JP/2017) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 23 ITA NO. 266/JP/2017 SH. GYAN CHAND AGARWAL, JAIPUR.