The Hindu Business Line : Power of attorney

If the Supreme Court was so upset with power of attorney transactions, don’t you think it should have struck down Section 53A of the Transfer of Property Act?

Charanya Rajagopalan, Chennai

Section 53A of the Transfer of Property Act says that a beneficial owner of an immovable property who has paid the consideration on purchase of the property or thereafter should not be fobbed off for want of nominal ownership testified by registration in his name.

This section is eminently in buyer’s interest and must not be construed as encouraging power of attorney transactions. In the absence of this section, the power of attorney holder would be left high and dry. His position would be even more vulnerable.

With the aid of this section, he can at least mount an attack on the avaricious seller should he continue to act as if he were the owner of the property taking advantage of absence of registration.

Similarly, the provisions in the income-tax and wealth tax laws as well as in the stamp duty regimes of certain States dealing with power of attorney transactions should not be misconstrued as once again giving a leg up to such transactions.

For, these statutes have a limited objective — to collect tax and deny room for manoeuvre. A seller cannot obviously be permitted to thumb his nose at the taxman by refusing to pay capital gains tax on the smug plea that he continues to be the owner of the property in official records despite having sold the property on power of attorney basis. What the apex court has pointed out subtly is the futility of the restrictions imposed on sale by housing authorities in the country in the name of curbing speculation.

S. MURLIDHARAN

ASK! Send in your queries to ask@thehindu.co.in

http://MentorQA.blogspot.com

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Surcharge on companies

Tax on unexplained expenditure

Relief eludes the salaried

Power of attorney

Clarity a must in new tax law

60 Seconds Chief