Part performance counts as transfer under income tax law, so profit on resale was taxable as short-term capital gain.

A written agreement to purchase property, coupled with payment of consideration and delivery of possession, satisfied the ingredients of part performance under section 53A of the Transfer of Property Act. That transaction therefore fell within the definition of "transfer" in section 2(47) of the Income-tax Act, even though no registered sale deed had been executed in favour of the assessee. The assessee's subsequent transfer of its interest in the property was thus a transfer of a capital asset, and the profit derived from that transaction was chargeable as short-term capital gain rather than income from other sources.

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Issues: Whether the profit arising from the sale of the property was taxable as short-term capital gain or as income from other sources, where the assessee had entered into a written agreement to purchase the property, paid the consideration, obtained possession, and thereafter transferred the property.

Analysis: The statutory definition of "transfer" in section 2(47) of the Income-tax Act, 1961 includes transactions falling within the nature of part performance contemplated by section 53A of the Transfer of Property Act, 1882. For section 53A to apply, there must be a written contract for transfer, consideration under the contract, execution by or on behalf of the transferor, ascertainable terms, and possession taken or retained in part performance. On the facts found, the agreement was in writing, consideration had been paid, possession had been delivered, and the transaction satisfied the ingredients of section 53A. The absence of a registered sale deed did not prevent the transaction from being treated as a transfer for income-tax purposes. The subsequent transfer of the assessee's interest to the Government of Mizoram therefore amounted to a transfer of a capital asset.

Conclusion: The profit derived from the transaction was chargeable as short-term capital gain and not as income from other sources.

Ratio Decidendi: A transaction satisfying section 53A of the Transfer of Property Act, 1882 is a transfer within section 2(47) of the Income-tax Act, 1961, and profit on its further sale is taxable as capital gain even if no registered sale deed had been executed in favour of the assessee.

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