OM PRAKASH SHARMA,JAIPUR V. INCOME TAX OFFICER WARD-7(2), JAIPUR

ITA 258/JPR/2025

AI Insights

The case revolves around an appeal by Shri Om Prakash Sharma against the order of the National Faceless Appeal Centre, Delhi, which confirmed the addition of Rs. 13,50,000 as capital gains under sections 143(3) and 147 of the Income Tax Act, 1961. The addition was based on the entire sale proceeds of a plot of land sold by the assessee, who was merely a power of attorney holder for Smt. Leela Devi Sharma, the actual owner. The Tribunal examined whether the assessee, as a power of attorney holder, could be considered the owner for tax purposes and whether the entire sale proceeds could be treated as income.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 298514 (ITAT-JAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Other Referred Cases: Commissioner of Income Tax Vs. Williamson Financial Services & Ors, Commissioner of Income Tax Vs. Balchand Ajitkumar, Commissioner of Income Tax Vs. President Industries, Manmohan Sadhani Vs. Commissioner of Income Tax, M/s Abhishek Corporation Vs. DCIT, Commissioner of Income Tax Vs. Samir Synthetic Mills, Brij Bhushan Lal Parduman Kumar Vs. CIT, State of Rajasthan vs. Basant Nehata, Suraj Lamp & Industries (P) LTD. vs. STATE OF HARYANA, ACIT Vs Janak Raj Chauhan
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAUTAM SINGH CHOUDHARY
• Assessee Lawyers: S. B. NATANI
• Keywords: Business income; Capital asset; Sale consideration of property below Jantri Value; Cost of acquisition; Document seized; Documents seized; Capital Gains; Principle of natural justice
• Section: 147; 148; 144; 142(1); 22; 13; 50C; 20

Judgement Text

"vk;djvihyh; vf/kdj.k] t;iqjU;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC’’ JAIPUR Mk0 ,l- lhrky{eh]U;kf;dlnL; ,oaJhjkBkSM+ deys'kt;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;djvihyla-@ITA. No. 258/JPR/2025 fu/kZkj.ko\"kZ@AssessmentYears : 2009-10 Shri Om Prakash Sharma 1, N.H. 8, Sanskar Bharti P.G. College Bagru 303 007 (Raj) cuke Vs. The ITO, Ward-7(2), Jaipur LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: BWKPS 4112 G vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assesseeby : Shri S.B. Natani, CA jktLo dh vksjls@Revenue by :Shri Gautam Singh Choudhary, Addl.CIT -DR a lquokbZ dh rkjh[k@Date of Hearing : 07/04/2025 mn?kks\"k.kk dh rkjh[k@Date of Pronouncement : 22 /04/2025 vkns'k@ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM The assessee has filed an appeal against the order of the order of the learned National Faceless Appeal Centre, Delhi [ for short CIT(A)] dated 20.12.2024 for the assessment year 2009-10 in the matter of Section 143(3)/ 147 of the Income Tax Act, 1961 raising therein following grounds of appeal:- 2 ITA NO.258/JPR/2025 OM PRAKASH SHARMA VS ITO, WARD 7(2), JAIPUR ‘’1. That in the facts and circumstances of the case and in law the ld. CIT(A) has erred in confirming the order passed by the AO u/s 147/143(3) in pursuance to notice issued u/s 148 unlawfully. 2. That in the facts and circumstances of the case and in law the ld. CIT(A) has erred in confirming addition of Rs.13.50 lacs made by the AO wrongly treating the entire sale proceeds of land as capital gain. 3. That in the facts and circumstances of the case and in law the ld CIT(A) has erred in confirming the order passed by the AO in making addition in the hands of the assessee whereas he was only a power of attorney holder. 4. That in the facts and circumstances of the case and in law the ld.CIT(A) has erred in confirming the order passed by the AO without providing adequate opportunity.’’ 2.1 Apropos grounds of appeal of the assessee, it is noticed that the ld. CIT(A) has dismissed the appeal of the assessee by observing at para 7 to 9 of his order as under:- ‘’7. As to the merits of the case, it can be noticed that no documentary evidence has been submitted by the appellant at the time of filing the appeal or subsequently. The appellant had not responded to the notices of hearing even during the appellate proceedings nor written submissions were filed in support of ground raised by him. It is pertinent to mention that in response to the merely making a ground of appeal is not sufficient to consider any claim; onus lies on the appellant to prove that required material evidence has been filed to substantiate its claim. The appellant had failed both at assessment and appeal proceedings to substantiate his claim. 8. In view of the above, it is clear that the appellant has not discharged his onus at any stage of departmental proceedings, be it assessment or appellate. Hence, I hold that the addition made by the AO towards amounting to Rs. 13,50,000/- is in order and no interference is called for The addition made by the AO is confirmed. 3 ITA NO.258/JPR/2025 OM PRAKASH SHARMA VS ITO, WARD 7(2), JAIPUR 9. In the result, the appeal is dismissed.’’ 2.2 During the course of hearing, the ld.AR of the assessee has filed the detailed written submission along with case laws as under:- Ground No. 1 That In the facts and circumstances of the case and in law the learned CIT(A) has erred in confirming the order passed by the learned AO under section 147/143(3) in pursuance to notice issued under section 148 unlawfully. 1. No Approval under section 151 is unlawful The learned AO was requested under letter dated 18.11.2019 copy of which is available on paper book page no. cited supra to furnish copy of reason recorded as well as copy of sanction given by the specified authority under section 151 but the same has not made available to the assessee till date. In the absence of copy of sanction letter under section 151 by the specified authority, the assessment is not backed by legal sanction. The assessee submits that in the case of the assessee no sanction under section 151 from the specified authority was obtained. If there had been sanction under section 151 the same should have been provided to the assessee. Despite passing of 6 years these primary records had not been made available to the assessee. The Hon’ble ITAT is requested to quash the assessment order on this ground alone. 2. Entire sales proceeds could not be considered as income of the assessee It is further submitted that although learned AO was having complete facts regarding the sale and acquisition of plots No. 73, sold by the assessee 4 ITA NO.258/JPR/2025 OM PRAKASH SHARMA VS ITO, WARD 7(2), JAIPUR during the year under consideration but despite this the learned AO has unlawfully not given deduction of indexed cost of acquisition. The assessee was a power of attorney holder of Smt Leela sharma who had acquired of plat on 22.06.1991 for a total sum of 16,171/- (Rs, 5,055 on16.05.198 + Rs. 6,116.00 on 22.06.1990). The cost of acquisition is mentioned in the copy of sale deed which is available on paper book page No…10 to 17. In view of this it was incumbent on the part of the learned AO to have allowed deduction of indexed cost of acquisition of Rs, 16,171/- as on 22.06.1990 which comes to Rs,6,07,550/- as on 16.09.2008. It is settled positions of law that total sale of the plot cannot be considered as income. Thus the notice under section 148 was issued determining wrong income. The following case law as quoted in support. i. Commissioner of Income Tax Vs. Williamson Financial Services & Ors (SLP(C) 2275/2007 (Hon’ble Supreme Court) The Hon’ble Supreme Court has held as under :- “It is important to bear in mind that under section 4 the levy is on “total income” of the assessee computed in accordance with and subject to the provisions of the Income Tax Act. What is chargeable to tax under the Income Tax Act is the profit and gains of a year. What is chargeable to tax under the Income Tax Act is not the gross receipts, but income. Under the Income Tax Act, the tax is on income and not on gross receipts.” ii. Commissioner of Income Tax Vs. Balchand Ajitkumar 263 ITR 610 (2003) Hon’ble MP High Court The Hon’ble High Court held that total sale cannot be regarded as the profit of the assessee. The net profit rate has to be adopted and once a net profit rate is adopted, it cannot be said that there is perversity of 5 ITA NO.258/JPR/2025 OM PRAKASH SHARMA VS ITO, WARD 7(2), JAIPUR approach. Whether the rate is low or high, it would depend upon the facts of each case. In the present case net profit rate of five per cent has been applied. It is not appropriate that the same requires to be enhanced. It is high. In any case, it cannot be said that there has been perversity of approach. iii. Commissioner of Income Tax Vs. President Industries (2002) 258 ITR 0654 – Hon’ble Gujrat High Court The Hon’ble High Court held that it cannot be a matter of an argument that the amount of sales by itself cannot represent the income of the assessee who has not disclosed the sales. The sales only represented the price received by the seller of the goods for the acquisition of which it has already incurred the cost. It is the realisation of excess over the cost incurred that only forms part of the profit included in the consideration of sales. iv. Manmohan Sadhani Vs. Commissioner of Income Tax, (2008) 304 ITR 0052 – Hon’ble M.P. HighCourt In this case, the Hon’ble Madhya Pradesh High Court held that the entire sale proceeds of the assessee cannot be treated as its income and net profit has to be applied. v.M/s Abhishek Corporation Vs. DCIT ITA No. 153/Ahd/1997 – ITAT, Ahmedabad The Hon’ble ITAT held that even though it is established from the seized documents that the assessee was receiving premium/on money on booking of flats belonging to third parties, entire receipts cannot be 6 ITA NO.258/JPR/2025 OM PRAKASH SHARMA VS ITO, WARD 7(2), JAIPUR treated as income of the assessee, only net profit rate can be applied on such unaccounted receipts/sales for making addition. vi. Commissioner of Income Tax Vs. Samir Synthetic Mills (2010) 325 ITR 0410 (Hon’ble Gujarat High Court) The Hon’ble High Court upheld the order of the ld. ITAT and held that any addition that is to be made is not in respect of the sale consideration, but only in respect of the profit. vii.Brij Bhushan Lal Parduman Kumar Vs. CIT (1978) 115 ITR 524 (SC) “The authority making a best judgment assessment must make an honest and fair estimate of the income of the assessee, same must not be capricious but should have a reasonable nexus to the available material and the circumstances of the case.” 3. The assessment completed is bad in law It is submitted that in the case of the assessee the learned AO has passed assessment order in a careless and clumsy manner. It is mentioned in the assessment order at one place (page 1 of the assessment order), that the return stood filed by the assessee on 12.07.2016 in response to notice under section 148 issued on 31.03.2016, but the learned AO issued show cause notice on 18.11.2016 which has been reproduced on page 2 of the assessment order mentioning that no return of income was filed and why the assessment should not be completed under section 144 of the income Tax Act. Further assessment has been completed without taking into consideration the return filed by the assessee disclosing income of Rs.44,520/-. IN view of this the assessment order has been completed in 7 ITA NO.258/JPR/2025 OM PRAKASH SHARMA VS ITO, WARD 7(2), JAIPUR violation of law without considering the income declared, hence the same deserves to be quashed. Details of notices issued by the learned AO and response submitted by the assessee as mentioned in the show cause notice reproduced at page No. 2 of the assessment order: - SNo Notice issued u/s Date of issue of notice Date for response Response given if any 1 u/s 142(1) 06.06.2016 & 27.06.2016 13.07.2016 12.07.2016 2 u/s 142 (1) & 143 (2) 01.08.2016 05.08.2016 05.08.2016 3 u/s 142(1) 11.08.2016 26.08.2016 These facts have been mentioned by the learned AO at para No. 2 on page No. 2 of the assessment order. From the above it is crystal clear that the assessee has responded each and every notices issued by the learned AO in the given time. In-spite of the learned AO has mentioned in the show cause notice dated 18.11.2016 that the assessee is non cooperative and in such circumstances why assessment should not be completed under section 144 of the income tax Act 1961. The relevant para of the order is quoted :- djnkrk ds ekeys esa mijksDr fu/kkZj.k dk;Zokgh ds nkSjku djnkrk ds ekeys esa dk;kZy; ds i= fnukad 18-11- 2016 ds }kjk vfUre volj@’kksdkt uksfVl tkjh dj Mkd ds }kjk rkfey djok;k x;kA tks fuEu izdkj gS%& ^^ mijksDr fo\"k;kUrxZr ys[k gS fd vkids ekeys esa izkIr lwpukvksa ds vk/kkj ij vk;dj vf/kfu;e 1961 dh /kkjk 147 ds rgr dkj.k fjdkMZ dj ekuuh; iz/kku vk;dj vk;qDr & r``rh;] t;iqj ds vuqeksnu ls vk;dj vf/kfu;e 1961 dh /kkjk 148 ds rgr uksfVl fnukad 31-03-2016 tkjh dj Mkd }kjk rkfey djok;k x;kA vkids ekeys esa le; ij lwpuk;sa ,oa vkidk tokc izkIr djus ds fy;s vk;dj vf/kfu;e 1961 dh /kkjk 142 ¼1½ ds rgr fnukad 06-06-2016 ,oa fnukad 27-06-2016 dks tkjh dj lquok;h fnukad 22-06-2016 ,oa fnukad 13-07-2016 j[kh x;hA vkids }kjk fnukad 12-07-2016 dks tokc izLrqr dj vk;dj fooj.kh is’k dh x;hA vkids ekeys esa vk;dj vf/kfu;e 1961 dh /kkjk 142¼1½ ,oa /kkjk 143¼2½ ds rgr fnukad 01-08-2016 dks tkjh dj lquok;h fnukad 05-08-2016 j[kh x;hA vkids ekeys esa vkids izfrfuf/k Jh ,l-ch- ukVk.kh }kjk fnukad 05- 08- 2016 dks tokc izLrqr fd;k x;kA vk;dj vf/kfu;e 1961 dh /kkjk 142¼1½ ds rgr fnukad 11-08-2016 dks 8 ITA NO.258/JPR/2025 OM PRAKASH SHARMA VS ITO, WARD 7(2), JAIPUR iqu% uksfVl tkjh dj lquok;h fnukad 26-08-2016 j[kh x;hA vkids }kjk u rks vk;dj fooj.k Hkjh x;h vkSj u dksbZ tokc izLrqr fd;k x;k gSA vkidks eq[R;kjvke fu;qDr djus ds dkj.kksa dh tkudkjh ,oa fooj.k izLrqr djus ds fy, fnukad 24-10-2016 dks Jherh yhyk ’kekZ iRuh Jh ,l- ,e- ’kekZ IykWV uacj 52@46] f’kizkiFk ekuljksoj] t;iqj dks i= tkjh dj fnukad 26-10-2016 dks O;fDrxr :Ik ls rkfey djokdj lquok;h fnukad 09-11-2016 j[kh x;hA Jherh yhyk ’kekZ }kjk i= dk tokc ugha fn;k x;k gSA blls Li\"V gS fd foØ; fd;k x;k IykWV vkidk gh gSA ftlds foØ; ij vkids }kjk iwWath ykHk ij vk;dj ugha fn;k x;k gSA Jheku ;g Li\"V gS fd vkids }kjk vk;dj vf/kfu;e] 1961 dh fu/kkZj.k dk;Zokgh esa vlg;ksx djus dk joS;k viuk fy;k x;kA pwWfd vkids ekeys esa esjs ikl dk;kZy; ds fjdkMZ esa miyC/k fooj.k@lwpukvksa ds vk/kkj ij vk;dj vf/kfu;e 1961 dh /kkjk 144 ds rgr fu/kkZj.k djus ds vfrfjDr dksbZ vU; fodYi ugha gSA vr% vkidks vkids ekeys esa viuk i{k j[kus ,oa okafNr lwpuk;sa izLrqr djus dk vfUre volj fn;k tk jgk gSA ;fn vki mDr i=@uksfVl dk tokc izLrqr djus esa vleFkZ jgrs gSa] rks ;g ekuk tk;sxk dh vki vius dj fu/kkZj.k ds laca/k esa dksbZ fooj.k@tokc gh ughsa djuk pkgrs gSa o vkidks vius ekeys esa /kkjk 144 ds rgr fu/kkZj.k ij dksbZ vkifRr ugha gSA vkids ekeys esa fu/kkZj.k fuEu fooj.kksa @lwpukvksa ds vk/kkj ij fd;k tkuk izLrkfor gS%& vkids }kjk foRrh; o\"kZ 2008&09 ds nkSjku Jh gsesUr dqekj esgrk dks :i;s 13]50]000@& dh jkf’k ij IykWV uacj 370] u;k uacj 73] vkWfQllZ dSEil foLrkj] fljlh jksM] t;iqj dk foØ; fnukad 16-09-2008 dks fd;k x;k gSA ftldh fcØh MhM dks lcjftVªkj & t;iqj f}th;] t;iqj }kjk fu\"ikfnr fd;k x;k gSA djnkrk }kjk lc&jftLVªkj }kjk fu\"ikfnr ewY; ij ¼vk;dj vf/kfu;e dh /kkjk 50 lh ½ ds vuqlkj IykWV foØ; ij iwWthxr ykHk ij vk;dj ugha fn;k x;k gSA vr% vkids ekeys esa :- 13]50]5000@& jkf’k D;ksa u v?kksf\"kr iwWthxr ykHk ekurs gq;s dqy vk; esa tksMdj fu/kkZj.k dj fn;k tk;sA vr% vkils vuqjks/k gS fd vki Lo;a ;k vius izkf/kd``r izfrfuf/k ds }kjk vkids dj fu/kkZj.k o\"k 2009&10 ds ekeys esa mDr O;ogkj ds laca/k esa tokc@fooj.k dk;kZy; vk;dj vf/kdkjh okMZ 7 ¼2½ t;iqj] lh & 95] ckck fl)ukFk Hkou] tuiFk] ykydksBh] t;iqj esa fnukad 28-11-2016 From the above it is crystal clear that the learned AO was prejudiced to make additions Ground No. 2 and 3 That In the facts and circumstances of the case and in law the learned CIT (A) has erred in confirming additions of Rs. 9 ITA NO.258/JPR/2025 OM PRAKASH SHARMA VS ITO, WARD 7(2), JAIPUR 13,50,000/- made by the learned AO wrongly treating the entire sale proceeds of land as capital gains. The learned AO had made additions of Rs. 13,50,000 which is the total sales consideration of the plot sold by the assessee under holder of Power of Attorney during the year under consideration. The action of the learned AO cannot be called by no stretch of imagination being in accordance with law. The learned AO was required to give deduction under section 48/49 of the income Tax Act 1961. The assessee has sold the plot in the capacity of Power of attorney holder executed in his favour by the plot owner Smt Leela Sharma. In view of this the cost of purchase of plot in the hands of Smt. Leela Sharma was required to be given deduction against the sale consideration. The capital gains are computed as under. Cost price of land Rs. 16171.00 Date of purchase 22.06.1990 DLC value as on 01.04.2001 Rs. 1500/- per sq meter (Copy of DLC rate certificate as on 01.04.2001 issued by sub-registrar is available on paper book page No 18 to 19.) Area of land 397.02 sq yards Sq yard converted into mtrs 397.02/1.0989 = 361.289 Sq mtrs Total value as on 01.04.2001 Rs. 1500X361.289 = Rs. 5,41,933/- Index point as on 01.04.2021 100 Index point for F Y 2008-2009 137 Indexed cost as on 31.03.2009 Rs. 5,41,933 x 137 = Rs. 7,42,450/- Sale value Rs. 13,50,000/- Long Term Capital gain Rs. 6,07,550/- (Rs, 13,50,000/- - Rs. 7,42,450/-) The Hon’ble ITAT is requested to grant relief accordingly It is further submitted that by no stretch of imagination the entire sales consideration cannot be considered as income of the 10 ITA NO.258/JPR/2025 OM PRAKASH SHARMA VS ITO, WARD 7(2), JAIPUR assessee. It is a case of long term capital gain and the assessee is entitled for deduction under section 48/49 of the income Tax Act 1961. It is submitted that the entire sale consideration of sale of land cannot be treated as income of the assessee. The following case laws are quoted in support. 1. Commissioner of Income Tax Vs. Williamson Financial Services & Ors (SLPI 2275/2007 (Hon’ble Supreme Court) The Hon’ble Supreme Court has held as under :- “It is important to bear in mind that under section 4 the levy is on “total income” of the assessee computed in accordance with and subject to the provisions of the Income Tax Act. What is chargeable to tax under the Income Tax Act is the profit and gains of a year. What is chargeable to tax under the Income Tax Act is not the gross receipts, but income. Under the Income Tax Act, the tax is on income and not on gross receipts.” 2. Commissioner of Income Tax Vs. Balchand Ajitkumar 263 ITR 610 (2003) Hon’ble MP High Court The Hon’ble High Court held that total sale cannot be regarded as the profit of the assessee. The net profit rate has to be adopted and once a net profit rate is adopted, it cannot be said that there is perversity of approach. Whether the rate is low or high, it would depend upon the facts of each case. In the present case net profit rate of five per cent has been applied. It is not appropriate that the same requires to be enhanced. It is high. In any case, it cannot be said that there has been perversity of approach. 11 ITA NO.258/JPR/2025 OM PRAKASH SHARMA VS ITO, WARD 7(2), JAIPUR 3. Commissioner of Income Tax Vs. President Industries (2002) 258 ITR 0654 – Hon’ble Gujrat High Court The Hon’ble High Court held that it cannot be a matter of an argument that the amount of sales by itself cannot represent the income of the assessee who has not disclosed the sales. The sales only represented the price received by the seller of the goods for the acquisition of which it has already incurred the cost. It is the onezation of excess over the cost incurred that only forms part of the profit included in the consideration of sales. 4. Manmohan Sadhani Vs. Commissioner of Income Tax, (2008) 304 ITR 0052 – Hon’ble M.P. HighCourt In this case, the Hon’ble Madhya Pradesh High Court held that the entire sale proceeds of the assessee cannot be treated as its income and net profit has to be applied. 5. M/s Abhishek Corporation Vs. DCIT ITA No. 153/Ahd/1997 – ITAT, Ahmedabad The Hon’ble ITAT held that even though it is established from the seized documents that the assessee was receiving premium/on money on booking of flats belonging to third parties, entire receipts cannot be treated as income of the assessee, only net profit rate can be applied on such unaccounted receipts/sales for making addition. 6. Commissioner of Income Tax Vs. Samir Synthetic Mills (2010) 325 ITR 0410 (Hon’ble Gujarat High Court) 12 ITA NO.258/JPR/2025 OM PRAKASH SHARMA VS ITO, WARD 7(2), JAIPUR The Hon’ble High Court upheld the order of the ld. ITAT and held that any addition that is to be made is not in respect of the sale consideration, but only in respect of the profit. 7. Brij Bhushan Lal Parduman Kumar Vs. CIT (1978) 115 ITR 524 (SC) “The authority making a best judgment assessment must make an honest and fair estimate of the income of the assessee, same must not be capricious but should have a reasonable nexus to the available material and the circumstances of the case.” Other case laws CIT Vs Shard real estate P Ltd (2014) 99 DTR 100 (MP) high court DCIT Vs Panna Corporation (2012) 74 DTR 89 Gujrat High court CIT Vs Bal chand Ajit kumar (2004) 186 CTR 419 ( MP) High court also listed at 263 ITR 610 CIT Vs Sameer Synthetics Mills (2010) 326 ITR 410 Gujrat High court CIT Vs President Industries (2000) 158 CTR 372 (Gujrat High court) Abhishek corporation Vs DCIT 63 TTJ 651 (AHD) ITO VS Gurucharan Singh Juneja 130 CTR 304 (Ahd Ground No. 3 That in the facts and circumstances of the case and in law the learned CIT (A) has erred in confirming the order passed by the learned AO in making additions in the hands of the assessee whereas he was only a power of Attorney holder. 13 ITA NO.258/JPR/2025 OM PRAKASH SHARMA VS ITO, WARD 7(2), JAIPUR It is submitted that an power of Attorney was executed on 12.09.2007 by Smt. Leela Devi Sharma W/o Shri S M Sharma resident of Plot No. 52/46 shipraparthMansarowar Jaipur in favour of assessee Shri Om prakash Sharma S/o Shri Mangal chandShrama Resident of Village karya Ka Bas, Bagru Tehsil Sanganer District Jaipur for maintenance/supervision/sales/representing on her behalf before the government office like jaipur Development Authority/Jaipur nagar Nigam/collect orate office etc. in respect of piece of land situated at Plot No. 73, officers Campus extension, Sirsi Road, Jaipur. This power of attorney was registered with the Deputy register VII Jaipur under registration NO. 2007400000531 Book No. 4 jild No. 8 page No. 71 Additional book NBO. 4 Jild No. 15 page No. 580 to 587. Copy of power of attorney is available on paper book page No cited supra. IT is mentioned in the power of Attorney in the last para of page No. two that this power of Attorney is being executed due to the reasons that smt. Leela Devi Sharma w/o Shri S M Sharma is very busy in her other works and formaintaining/supervision/ sales/representing on her behalf before the Government Office(s) like Jaipur Development Authority/Jaipur nagar Nigam/collect orate office etc. in respect of piece of land situated at Plot No. 73, officers Campus extension, Sirsi Road, Jaipur this power of Attorney was executed in favour of the assessee She Om Prakash Sharma . It is submitted that on verbal instruction/acceptance of Smt. Leela Devi Sharma W/o Shri S M Sharma the said property situated at Plot No. 73, officers Campus extension, Sirsi Road, Jaipur was sold for Rs. 13,50,000/- to one Shri Hemendra Kumar Mehta S/o Late shri Vridi Chand Mehta Resident of Plot No. A-16, Sain Colony, Kabri Marg , Bani Park, Jaipur Rajasthan by the assessee Shri Om Prakash Sharma for and on behalf of Smt. Leela Devi Sharma under holder of power of Attorney. The learned AO on receipt of information (Source not mentioned any where) issued notice under section 148 to the assessee. The assesee in response to queries letters issued under section 142(1) has clearly stated that he was never the owner of the said property, and the said property was sold as 14 ITA NO.258/JPR/2025 OM PRAKASH SHARMA VS ITO, WARD 7(2), JAIPUR holder of power of attorney of Smt. Leela Devi Sharma W.o Shri S M Sharma. Copies of replies dated 09.08.2016 and 01.12.2016 and relevant document furnished before the learned AO is available on paper book page No. 20 to 26. The learned AO has after ignoring/rejecting the plea of the assessee made the addition Rs, 13,50,000/- (Complete sales consideration) in the total income of the assessee. The learned AO has rejected the plea of the assessee on the following grounds 1. That assessee has not disclosed the reason(s) and object(s) for execution of power of attorney in favour of assessee. 2. That Smt. Leela Devi Sharma W/o Shri S. M Sharma the Executor of power of Attorney has not furnished any response to notice issued to her under section 142(1) of the income Tax Act 1961 Relevant portion of the order is scanned below. 15 ITA NO.258/JPR/2025 OM PRAKASH SHARMA VS ITO, WARD 7(2), JAIPUR On perusal of the above it reveals that the plea of the assessee that the plot situated at Plot No. 73, officers Campus extension, Sirsi Road, Jaipur was sold under power of Attorney and the assesee was not owner of the said property hence no capital gain arises in the hands of the assesee could not have been rejected .the power of attorney was granted by the owner for practical purpose of day to daymaintenance . further assessee 16 ITA NO.258/JPR/2025 OM PRAKASH SHARMA VS ITO, WARD 7(2), JAIPUR was having better knowledge about the area for purposes of sale of the plot The reason for executing power of Attorney is mentioned in the power of Attorney itself. In the last para of page No. 2 of the power of Attorney reasons for executing power of Attorney is mentioned as under – The relevant portion of the power of attorney is scanned here below On perusal of the above it is crystal clear that Smt. Leeta devi Sharma was busy in her other work and could not devote her time for the maintenance supervision and completing the formalities for Government departments. 17 ITA NO.258/JPR/2025 OM PRAKASH SHARMA VS ITO, WARD 7(2), JAIPUR Therefore due to this power of Attorney was executed in favour of the assessee. i. It is submitted that vide letter dated 09.08.2016 during the course of assessment proceedings the leaned AO was informed that Smt. Leela Sharma has given the power of Attorney to assessee Shri Om parkash Sharma as care takerand also to handle the legal proceedings, if any, also to dispose of the land. ii.This fact has been mentioned by the learned AO in his letter dated 11.08.2016 “order disposing the objections raised by the assessee against issuance of notice under section 148 of the IT Act” at para No. 4 of page No. 2. Relevant portion of the order is reproduced hereunder :- 18 ITA NO.258/JPR/2025 OM PRAKASH SHARMA VS ITO, WARD 7(2), JAIPUR 19 ITA NO.258/JPR/2025 OM PRAKASH SHARMA VS ITO, WARD 7(2), JAIPUR iii.Copy of this letter is available on paper book page No……27 to 31. In view of the aforesaid facts it is establish beyond doubt that execution of power of attorney was a genuine affair . the plot never belong to the assessee the capital gain arising on sale of plot therefore require to be asseseed in the hands of Smt. Leela Devi and not in the hands of the assesseee. Assessee is not liable for non response of others Secondly it is submitted that there may hundreds of reason for not responding of the notice issued by the income tax officer like i. Notice of the learned AO was not served upon Smt. Leela Sharma ii. Notice issued by the learned AO may not be served in time iii. Smt Leela devi Sharma may be out of station iv. Smt. Leela devi Sharma may not be in position to reply the same v. Smt. Leela devi Sharma or her representative might have presented but was not entertained. vi. And foremost smt. Leela Devi Sharma might have saved her interest by not responding the notices issued by the assessing officer. Further it is submitted that in all the courts whether it is lower court, session court, Tribunals, High courts and Supreme Courts, or other Government Departments like Income Tax, Goods and services tax and all other Government Revenue Department all the work is being done by lawyers/advocates/chartered Accountants on Power of attorney and that too unregistered Power of Attorney. If in any of the case or all of such cases any summons /penalty/ demand is raised that was not responded by the petitioner(s)/principal than can it be 20 ITA NO.258/JPR/2025 OM PRAKASH SHARMA VS ITO, WARD 7(2), JAIPUR a case that such Lawyer/ Advocate /Chartered Accountants be held liable and forced to face the consequences. In the case of the assesee it is reiterated that the assessee has acted only as a power of Attorney holder and that too a Power of Attorney which is Registered with Deputy registrar after paying applicable stamp duty. Therefore he should not be held liable for not giving any response by the executor/principal of power of Attorney to the notice(s) issued by the Income tax Department. Therefore it is the submission of the assessee that the assessee should not be suffer/punished for an act or of others. It is submitted that neither the assessee was knowing about the issuance of notice to smt. Leela Devi Sharma nor he is responsible to ensure her attendance before the learned AO. It is reiterated that the said land situated at Plot No. 73, officers Campus extension, Sirsi Road, Jaipur, sold by the assessee has been sold by and on behalf of principal Smt. Leela Devi Sharma W/o Shri M N Sharma under her registered power of Attorney executed and registered on 12.09.2007. And thus the assessee is not at all liable for the profit/loss (capital gain). A power of attorney is not an instrument of transfer IT is submitted that power of attorney is not an instrument of transfer in regard to any right, title or interest in an immovable property. The power of attorney is creation of an agency whereby the grantor 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 revocable or terminable at any time unless it is made irrevocable in a manner known to law. Even an irrevocable attorney does not have the effect of transferring title to the grantee. The one in exercise of his power under such power of attorney only acts in place of the donor subject of course to the powers granted to him by reason thereof. He cannot use the power of attorney for 21 ITA NO.258/JPR/2025 OM PRAKASH SHARMA VS ITO, WARD 7(2), JAIPUR his own benefit. He acts in a fiduciary capacity. Therefore by any mean the holder of power of Attorney cannot be termed as owner of the Property. It is submitted that the assessee has acted as an agent of grantor of power of Attorney Smt. Leela Devi Sharma The assessee was never owner of the said property It is submitted that the Capital gain shall arise on sale of Capital assets. It is the submission of the assesee that he has not sold the said property under his own, the said property was sold under the power of Attorney of Smt. Leela Devi Sharma. The learned AO has made the added the complete Sale amount of Rs, 13,50,000/- to the total income of the assessee without establishing the fact that the assesee is a owner of the said property. Therefore the learned AO has not justified in making the additions. It is the submissions of the assessee to kindly delete the addition made by the learned AO. It is further submitted that he said property does not belongs to the assessee hence the provisions of section 50C are also not applicable upon the assessee. The fact that the assessee is acting as a holder of power of Attorney is mentioned in the sale deed It is submitted that the assessee has clearly disclosed the fact while executing the sale deed of the property that he is acting as a holder of 22 ITA NO.258/JPR/2025 OM PRAKASH SHARMA VS ITO, WARD 7(2), JAIPUR the power of attorney. The relevant portion of the sale deed is scanned below- 23 ITA NO.258/JPR/2025 OM PRAKASH SHARMA VS ITO, WARD 7(2), JAIPUR On perusal of the above it is crystal clear that the said property is sold by the asseseee under power of Attorney. Hence the assessee is not liable for any capital gain Sales consideration of Rs. 13,50,000/- was handed over to Smt. Leela Devi Sharma It is submitted that the Sales Consideration of Rs 13,50,000/- was handed over to Smt Leela Devi Sharma S/o Shri S N Sharma. This fact was disclosed by the assessee before the Chief Judicial magistrate, Serial No. 2 Jaipur Development Authority Jaipur during the statement recorded on 29.03.2016 Copy of certified copy of statements recorded on 29.03.2016 before chief Judicial magistrate, serial No. 2 Jaipur Development Authority, Jaipur is available on paper book page No…32 to 37… Decisions of the Courts It is submitted that various courts including Apex court has delivered decisions on the issue of Capital gain arises on sale of property under power of Attorney in favor of the assessee A. Honorable supreme court of India (Apex court) in the case of In State of Rajasthan vs. Basant Nehata – 2005 (12) SCC 77, this Court held : Scope of Power of Attorney A power of attorney is not an instrument of transfer in regard to any right, title or interest in an immovable property. The power of attorney is creation of an agency whereby the grantor authorizes the grantee to do the 24 ITA NO.258/JPR/2025 OM PRAKASH SHARMA VS ITO, WARD 7(2), JAIPUR 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 revocable or terminable at any time unless it is made irrevocable in a manner known to law. Even an irrevocable attorney does not have the effect of transferring title to the grantee. In State of Rajasthan vs. Basant Nehata – 2005 (12) SCC 77, this Court held : “A grant of power of attorney is essentially governed by Chapter X of the Contract Act. By reason of a deed of power of attorney, an agent is formally appointed to act for the principal in one transaction or a series of transactions or to manage the affairs of the principal generally conferring necessary authority upon another person. A deed of power of attorney is executed by the principal in favour of the agent. The agent derives a right to use his name and all acts, deeds and things done by him and subject to the limitations contained in the said deed, the same shall be read as if done by the donor. A power of attorney is, as is well known, a document of convenience. Execution of a power of attorney in terms of the provisions of the Contract Act as also the Powers-of-Attorney Act is valid. A power of attorney, we have noticed hereinbefore, is executed by the donor so as to enable the one to act on his behalf. Except in cases where power of attorney is coupled with interest, it is revocable. The one in exercise of his power under such power of attorney only acts in place of the donor subject of course to the powers granted to him by reason thereof. He cannot use the power of attorney for his own benefit. He acts in a fiduciary capacity. Any act of infidelity or breach of trust is a matter between the donor and the one.” An attorney holder may however execute a deed of conveyance in exercise of the power granted under the power of attorney and convey title on behalf of the grantor. 25 ITA NO.258/JPR/2025 OM PRAKASH SHARMA VS ITO, WARD 7(2), JAIPUR B We also rely upon the decision of the Apex court in the case of SURAJ LAMP & INDUSTRIES (P) LTD. vs. STATE OF HARYANA2012) 340 ITR 0001 : (2011) 202 TAXMAN 0607 (SUPREME COURT OF INDIA) On the issue of non appearance of Smt. Leela Devi Sharma on dated 09.11.2016 inspite of issue notice dated 24.10.2016 and personally served upon smt. Leela Devi Sharma, it is submitted that Smt. Leela Devi Sharma may have her vested interest in non appearance before your kind honour. When you yourself having vast powers could not forced to smt. Leela Devi Sharma to appear before your kind honour how the poor assessee who has no power may be asked to do so. C Suraj NaraianKhatoria Vs Income tax officer ITA No. 1043/JP/2011 ITAT Jaipur date of order 27.05.2013 A Y 2008-2009 It has been held that 13. Perusal of the sale deed dated 19.12.2007 at page no. 50 of the assessee’s paper book it is revealed that said shri Suraj Naraian 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 no reliable material or documentary evidence on record to show that the said shri Suraj Naraian, the appellant before us had purchased the afore said land 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 matter 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 ever upto the time of enquiries made by the assessing officer. The appellant, thus, being neither owner not a deemed owner of the said capital asset, the said capital asset cannot be taken as 26 ITA NO.258/JPR/2025 OM PRAKASH SHARMA VS ITO, WARD 7(2), JAIPUR property of the appellant. The sale consideration of the aforesaid land,therefore could not be a subject matter of transfer of his own capital assets. The income tax Department has also not assessed him as a representative assessee or an agent of the said Shri Bhagat Sing and Shri Vijay Pal Singh and as such question of making assessment of income from capital gains by application of provisions of section 50-C of the Act adopting full value of consideration at Rs, 2 Lacs in his hand, 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 the same may be a subject matter of taxation in the hands of the real owners. In view of the matter, the additions so made being unjust and uncalled for, the same is directed to be deleted. D IN THE INCOME TAX APPELLATE TRIBUNAL CAMP BENCH AT JALANDHAR Before Sh. N. K. Saini, Hon’ble Vice President and Sh. Ravish Sood, Judicial Member ITA No.212/Asr./2018 :Asstt. Year : 2010-11 Date of order 17.01.2019 11. We have considered the submissions of both the parties and perused the material available on the record. In the present case, it is an admitted fact that the assessee was given general Power of Attorney by Smt. Harsharan Kaur to maintain the property. The said property was not transferred in the name of the assessee at any point of time and later on the Power of Attorney was given to one Sh. Deepak Pal Singh 27 ITA NO.258/JPR/2025 OM PRAKASH SHARMA VS ITO, WARD 7(2), JAIPUR 12. On a similar issue in the case of Suraj Lamp & Industries (P) Ltd. Vs state of Haryana in SLPI No. 13917 of 2009 dated 11.10.2011 (supra) their Lordships held in paras 13 & 18 as under: “13. A power of attorney is not an instrument of transfer in regard to any right, title or interest in an immovable property. The power of attorney is creation of an agency whereby the grantor 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 revocable: or terminable at any time unless it is made irrevocable in a manner known to law. Even an irrevocable attorney does not have the effect of transferring title to the grantee. In State of Rajasthan V/s. Basant Nehata – 2005 (12) SCC 77, this Court held : “A grant of power of attorney is essentially governed by Chapter X of the Contract Act. By reason of a deed of power of attorney, an agent is formally appointed to act for the principal in one transaction or a series of transactions or to manage the affairs of the principal generally conferring necessary authority upon another person. A deed of power of attorney is executed by the principal in favour of the agent. The agent derives a right to use his name and all acts, deeds and things done by him and subject to the limitations contained in the said deed, the same shall be read as if done by the donor. A power of attorney is, as is well known, a document of convenience. Execution of a power of attorney in terms of the provisions of the Contract Act as also the Powers-of-Attorney Act is valid. A power of attorney, we have noticed hereinbefore, is executed by the donor so as to enable the one to act on his behalf. Except in cases where power of attorney is coupled with interest, it is revocable. The one in exercise of his power under such power of attorney only acts in place of the donor subject of course to the powers 28 ITA NO.258/JPR/2025 OM PRAKASH SHARMA VS ITO, WARD 7(2), JAIPUR granted to him by reason thereof. He cannot use the power of attorney for his own benefit. He acts in a fiduciary capacity. Any act of infidelity or breach of trust is a matter between the donor and the one.” An attorney holder may however execute a deed of conveyance in exercise of the power granted under the power of attorney and convey title on behalf of the grantor. 18. We have merely drawn attention to and reiterated the well settled legal position that SA/GPA/WILL transactions are not ‘transfers’ or ‘sales’ and that such transactions cannot be treated as completed transfers or conveyances. They can continue to be treated as existing agreement of sale. Nothing prevents affected parties from getting registered Deeds of Conveyance to complete their title. The said ‘SA/GPA/WILL transactions’ may also be used to obtain specific performance or to defend possession under section 53A of TP Act. If they are entered before this day, they may be relied upon to apply for regularization of allotments/leases by Development Authorities. We make it clear that if the documents relating to ‘SA/GPA/WILL transactions’ has been accepted acted upon by DDA or other developmental authorities or by the Municipal or revenue authorities to effect mutation, they need not be disturbed, merely on account of this decision.” 13. So, respectfully following the ratio laid down in the aforesaid referred to case, we are of the view that only on this basis that a general Power of Attorney was given to the assessee by Smt. Harsharan Kaur to maintain the property, it cannot be said that the assessee received the property and was liable to pay the tax on the stamp duty value of the said property. E. A similar view has been taken by the Co-ordinate Bench in the case of ACIT Vs Janak Raj Chauhan (supra) wherein it has been held as under: “6.5 On consideration of the above facts, we are of the view that the CIT(A) was justified in deleting the addition. The POA would not give right to the assessee in his individual capacity to acquire any right, title or interest in the 29 ITA NO.258/JPR/2025 OM PRAKASH SHARMA VS ITO, WARD 7(2), JAIPUR property unless the facts are brought on record that POA was subject to consideration. The AO has not brought any evidence on record to justify his estimate of income. Mere recovery of POA from the possession of the assessee is not enough to estimate income against the assessee. The law is clear that POA is meant for doing the certain acts on behalf of the principal. It is also subject-matter of cancellation. Only certain acts which have been authorised by the POA could be exercised. Therefore, the AO was not justified in drawing adverse inference against the assessee that on the basis of recovery of POA the assessee earned the income. There is no merit in the appeal of the Revenue. The same is accordingly dismissed on this ground.” 15. So, respectfully following the aforesaid referred to order, the impugned addition made by the AO and sustained by the ld. CIT(A) is deleted. 16. In the result, the appeal of the assessee is allowed. (Order Pronounced in the Court on 17/01/2019) conclusion In view of the above facts of the case it is submitted that the plot of land was sold by the assessee under a power of attorney of smt. Lila Devi Sharma. The actual owner of the plot was Smt. Leela Devi Sharma and not the assessee. The assessee was never the owner of the plot. And in view of the finding given by the Hon’ble supreme court of India in the above mentioned two cases and ITAT in the above mentioned cases, your honour is requested that the addition made by the learned AO of Rs. 13,50,000/- on account of Capital gain may kindly deleted Ground No.4 That In the facts and circumstances of the case and in law the learned CIT A has erred in confirming the order passed by the learned AO without providing adequate opportunity. 30 ITA NO.258/JPR/2025 OM PRAKASH SHARMA VS ITO, WARD 7(2), JAIPUR It is submitted that the learned CIT (A) has dismissed the appeal of the assessee on the ground that the assessee has not responded to the notices of hearing even during the appellate proceedings nor written submissions were filed in support. In this regard it is submitted that the last opportunity provided by the learned CIT (A) was 22.08.2024 fixing the date of hearing for 28.08.2024 (as mentioned at page No. 3 of the appellate order), whereas the CIT (A) has passed the appellate order on 20.12.2024 i.e. after 4 months (114 days) of last opportunity granted by the learned CIT (A). It is the submission of the assessee that in the interest of equity and justice and principles of natural justice, the learned CIT(A) instead of sitting over the matter for pretty long period of 4 months, he could given this much of time to the assessee for reply, but this was not done. Hence the appellate order passed by the learned CIT(A) is against the principles of natural justice. It is also noteworthy to mention that the ld. AR of the assessee has filed the following paper book containing pages 1 to 36 countering the order of the lower authorities. S.N. Particulars Paper book Page No(s) 1. Copy of registered power of attorney executed on 12-09-2007 1 to 4 2. Copy of the acknowledgement of return of income filed by assessee on 12-07-2016 5 to 6 3. Copy of letter dated 12-07-2019 furnished before the AO during assessment proceedings regarding furnishing of return in response to notice u/s 148 7 4. Copy of letter dated 18-11-2019 requesting the AO to furnish certain details/documents 8 to 9 5. Copy of sale deed executed on 16-09-2008 wherein 10 to 17 31 ITA NO.258/JPR/2025 OM PRAKASH SHARMA VS ITO, WARD 7(2), JAIPUR it is specifically mentioned that the assessee is acting as a holder of power of attorney Smt.Leela Devi Sharma W/o Shri S.N. Sharma resident of Plot No. 52/46, Shipra Path, Mansarovar, Jaipur 6. Copy of DLC rate certificate as on 01-04-2001 issued by Treasury 18 to 19 7. Copies of replies dated 8-09-2016 and 01-12-2016 and relevant documents furnishing before the AO 20 to 26 8. Copy of letter dated 11-08-2016 issued by AO 27 to 31 9. Copy of certified copy of statements recorded on 29- 03-2016 before Chief Judicial Magistrate, Serial No. 2, Jaipur Development Authority,Jaipur 32 to 36 The ld. AR of theassessee submitted that the sale consideration relating to sale of the plot amounting to Rs.13.50 lacs was handed over to Smt. Leela Devi Sharma W/o Shri S.M. Sharma. The assessee in this case is only a power of attorney holder as per copy of the registered power of attorney executed on 12-09-2007 between Smt. Leela Sharma and Shri Om Prakash Sharma and the assessee has done all the activities in connection with sale of plot only on the basis of the power of attorney. It is also submitted by the ld.AR of the assessee that the amount of sale consideration of Rs.13.50lacs was handed over to Smt. Leela Devi Sharma is evident from the record. This fact was disclosed by the assessee before the Chief Judicial 32 ITA NO.258/JPR/2025 OM PRAKASH SHARMA VS ITO, WARD 7(2), JAIPUR Magistrate, Kram No,. 2, Jaipur Development Authority, Jaipur during the statement recorded on 29-03-2016. To this effect, the ld. AR of the assessee has filed the certified copy of statements recorded on 29-03-2016 before Chief Judicial Magistrate, Kram No. 2, JDA, Jaipur which is placed at pages 32 to 37 of the paper book. The ld.AR of the assessee has also taken resort of the decision of Hon’ble Supreme Court in the case of State of Rajasthan vs Basant Nehata (2005) 12 SCC 77 wherein it is held that An attorney hold may however execute a deed of conveyance in exercise of the power granted under the power of attorney and convey title on behalf of the grantor. Thus the ld. AR of the assessee prayed that the addition so made by the AO in the hands of the assessee Shri Om Prakash Sharma is not justified and the same needs to be deleted. 2.3 On the other hand, the ld.DR supported the orders of the lower authorities. 2.4 We have heard both the parties and perused the materials available on record. Brief facts of the case are that the assessee is an 33 ITA NO.258/JPR/2025 OM PRAKASH SHARMA VS ITO, WARD 7(2), JAIPUR Individual. The assessee is a mainly Agriculturist and doing agricultural activities, however during the year under consideration the assessee was a partner in a small firm M/s Om Prakash Laduram, AnajMandhi, Bagru. It is noted that during the year under consideration the assessee was having income from business (as partner of M/s Om prakash Laduram), and Agricultural income. It is also noted that during the year under consideration the assessee had sold a plot of land situated at numbering 73, at officers campus extension, Sirsi Road, Jaipur on 16.09.2008 to Shri Hemendra Kumar Mehta for a consideration of Rs. 13,50,000/-. The plot was sold by the assessee in the capacity of holder of Power of attorney of Smt. Leela Sharma w/o of S M Sharma. The Power of Attorney was executed on 12.09.2007.These facts are evident from the sale deed and Copy of which is available on paper book page no to 4. It is also noteworthy to mention that the plot in question was acquired by Smt. Leela Sharma on 22.06.1990 from Sanyunkt Grah Nirman Sahakari samitti for a sum of Rs. 16,171/- (Rs, 5,055 on 16.05.198 + Rs. 6,116.00 on 22.06.1990). Based on this information, the AO issued notice under section 148 on 31.3.2016. In response to notice issued under section 148, 34 ITA NO.258/JPR/2025 OM PRAKASH SHARMA VS ITO, WARD 7(2), JAIPUR the return was filed on 12.07.2016 disclosing income of Rs. 44,520/-. (Income From Partnership firm M/s Om Prakash Laduram) along with agricultural income of Rs. 60,000/-. A copy of acknowledgement of return of income is available on paper book page No5 to 6.The fact is that the assessee filed his return of income in response to notice issued under section 148, was informed to the AO under letter dated 12.07.2019 and copy of this letter is available on paper book page NO. 7. The AO completed assessment on 06.12.2016 under section 147/143(3) treating the entire sales consideration of land Rs. 13,50,000/- as income of the assessee. Being aggrieved by the order of the AO, the assessee preferred appeal before the ld.CIT(A). During the course of pendency of appeal before the ld CIT(A) the assessee had requested the AO, ITO ward 7 (2) vide letter dated 18.11.2019 to furnish copy of sanction letter under section 151 by the specified authority approving the recording of reasons. However,the AOdid not furnish the required information in the absence of which the assessee failed to contest Appeal before the ld.CIT(A). The Copy of letter dated 18.11.2019 is available on paper book page NO.8 to 9. The AO did not furnish information and thus the assessee 35 ITA NO.258/JPR/2025 OM PRAKASH SHARMA VS ITO, WARD 7(2), JAIPUR had to suffer on account of inaction on the part of the AO as in the meanwhile the appeal of the assessee was dismissed by the ld CIT (A) vide order dated 20.12.2024. The Bench has taken into consideration the entire episode in mind and noted that the Smt. Leela Devi Sharma had executed the power of attorney on 12-09-2007 making Shri Om Prakash Sharma as power of attorney holder wherein Smt. Leela Devi Sharma had given all the powers to Shri Om Prakash Sharma for maintenance / supervision/ sales/ representing on her behalf before the Govt. Office like Jaipur Development Authority/Jaipur Nagar Nigam/ Collectorate Office etc. in respect of piece of land situated at Plot No. 73, Officers Campus extension, Sirsi Road, Jaipur. This power of attorney was registered with the Deputy Registrar VII,Jaipur under Registration No. 2007400000531 Book No. 4, Jild No. 8 page No. 71, Additional Book NBO 4 Jild No. 15 page no 580to 587. It is also noted from the Power of Attorney executed between Smt. Leela Devi Sharma and Shri Om Prakash Sharma wherein it is mentioned in the last para No. 2 that this power of attorney is being executed due to the reasons that Smt. Leela Devi Sharma W/o Shri S.M. Sharma is very busy in her other works and for maintaining/ supervision/ sales/ representing on her behalf before the Govt. 36 ITA NO.258/JPR/2025 OM PRAKASH SHARMA VS ITO, WARD 7(2), JAIPUR Officer (s) like Jaipur Development Authority/ Jaipur Nagar Nigam/ Collectorate Office etc. in respect of piece of land situated at Plot No. 73, Officers Campus Extension, Sirsi Road, Jaipur. Thus the power of attorney was executed and igned in favour of the assessee Shri Om Prakash Sharma. It is noted from the records that the assessee had not sold the said property under his own but the said property was sold under the power of attorney of Smt. Leela Devi Sharma. The AO added the complete sale amount of Rs.13.50 lacs to the total income of the assessee without establishing the fact that the assessee is an owner of the said property. It is also noted from the records that the actual owner of the above mentioned property was Smt. Leela Devi Sharma and not Shri Om Prakash Sharma who has been made Power of Attorney holder to accomplish the task as mentioned in the power of attorney executed between them. We also noted that Shri Om Prakash Sharma, assessee acted as a holder of the power of attorney. The relevant portion of the sale deed is scanned below. 37 ITA NO.258/JPR/2025 OM PRAKASH SHARMA VS ITO, WARD 7(2), JAIPUR From the above sale letter, it is noted that the assessee Shri Om Prakash Sharma has acted and sold the property under power of attorney and he is not liable for capital gain. The sale consideration amounting to Rs.13.50 38 ITA NO.258/JPR/2025 OM PRAKASH SHARMA VS ITO, WARD 7(2), JAIPUR lacs so received by the assessee was handed over to Smt. Leela Devi and this fact was disclosed by the assessee before the Chief Judicial Magistrate, Kram 2, Jaipur Development Authority, Jaipur in the case of Hemant Kumar Mehta vs Om Prakash Sharma during statement recorded on 29-03-2016. The relevant part of the statement is reproduced as under:- Üलाट क े सàबÛध मɅ ͪववाद होने कȧ बात मɇने कभी लȣला शमा[ को नहȣं बताई। Ǒदनांक 12.09.2007 तक मɇ Üलाट कȧ एवज मɅ कोई पैसा नहȣं Ǒदया था अजवुद कहा ͩक ͪवĐयपğ ǓनçयाǑदत हुआ तब पैसा Ǒदया था। ͪवĐय पğ Ǒदनांक 16.09.2008 को ͧलखा गया था, उसी Ǒदन लȣला शमा[को मɇने 13,50,000/- Ǿपये Ǒदये थे। We also take into consideration the decision of Hon’ble Supreme Court in the case of State of Rajasthan vs Basant Nehta (supra) wherein it is held that:- ‘’A grant of power of attorney is essentially governed by Chapter X of the Contract Act. By reason of a deed of power of attorney, an agent is formally appointed to act for the principal in one transaction or a series of transactions or to manage the affairs of the principal generally conferring necessary authority upon another person. A deed of power of attorney is executed by the principal in favour of the agent. The agent derives a right to use his name and all acts, deeds and things done by him and subject to the limitations contained in the 39 ITA NO.258/JPR/2025 OM PRAKASH SHARMA VS ITO, WARD 7(2), JAIPUR said deed, the same shall be read as if done by the donor. A power of attorney is, as is well known, a document of convenience. Execution of a power of attorney in terms of the provisions of the Contract Act as also the Powers-of-Attorney Act is valid. A power of attorney, we have noticed hereinbefore, is executed by the donor so as to enable the one to act on his behalf. Except in cases where power of attorney is coupled with interest, it is revocable. The one in exercise of his power under such power of attorney only acts in place of the donor subject of course to the powers granted to him by reason thereof. He cannot use the power of attorney for his own benefit. He acts in a fiduciary capacity. Any act of infidelity or breach of trust is a matter between the donor and the one.” Hence, an attorney holder may however execute a deed of conveyance in exercise of the power granted under the power of attorney and convey title on behalf of the grantor. Hence, in view of all these facts and circumstances of the case, we do not concur with the orders of the lower authorities and thus addition so made amounting to Rs.13.50 lacs in the hands of the assessee is directed to be deleted. 40 ITA NO.258/JPR/2025 OM PRAKASH SHARMA VS ITO, WARD 7(2), JAIPUR 3.0 In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 22/04/2025. Sd/- Sd/- ¼Mk0 ,l- lhrky{eh ½ ¼jkBksMdeys'kt;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;dlnL;@Judicial Member ys[kklnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 22/04/2025 *Mishra vkns'k dh izfrfyfivxzsf’kr@Copy of the order forwarded to: 1. vihykFkhZ@The Appellant- Shri Om Prakash Sharma, Jaipur. 2. izR;FkhZ@The Respondent- ITO, Ward-7(2), Jaipur 3. vk;djvk;qDr@CIT 4. foHkkxh; izfrfuf/k] vk;djvihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur. 5. xkMZQkbZy@Guard File {ITA No.258/JPR/2025} vkns'kkuqlkj@By order lgk;diathdkj@Asst. Registrar "