On agpa holder can be levied tax who sold the property to third party

Hi Srinivasa,

X executed an AGPA in favor of Z on 12.02.2023 for ₹39,15,000. Under Section 2(47) of the Income Tax Act, 1961, the transfer of property via AGPA is considered a taxable event for capital gains, even if the property is later sold by Z. Since X received the sale consideration in FY 2022-23, the capital gains should be reported in AY 2023-24.

The subsequent sale by Z to Y for ₹83,00,000 on 20.02.2024 does not impact X’s tax liability. X is not liable for any capital gains tax on this transaction since he did not receive any portion of the additional sale value. Only Z is responsible for reporting capital gains on the sale of the constructed house in AY 2024-25.

If X’s Form 26AS reflects transactions for both years, he should ensure his ITR correctly reports the taxable event in AY 2023-24 and clarify that the later transaction was executed by Z. If required, he can submit supporting documents to avoid any tax miscalculation.

For further guidance on tax filings or disputes, reach out to me at adv.vishesh@icloud.com.

Z sold the property in the capacity of power agent of X and not as a owner therefore  X can be held liable for payment of capital gains tax. 

Z can deduct the charges towards the construction and return the balance if any to X to enable X to file ITR accordingly. 

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