Capital gains transfer date turns on execution of the sale document, not presentation or completion of registration.

For capital gains under the Income-tax Act, the operative date of transfer of immovable property is the date of execution of the document, not the date of presentation for registration or completion of registration. Section 45 taxes gains in the previous year in which the transfer occurs, and the statutory meaning of "transfer" in section 2(47) turns on when the transfer becomes operative so that the transferor's rights cease and the transferee's rights arise. Section 47 of the Registration Act, 1908 supports relation back to the date of execution once the document is duly registered. The transfer is therefore treated as effected on execution for section 45 purposes.

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Issues: Whether, for the purpose of capital gains under the Income-tax Act, a transfer of immovable property exceeding Rs. 100 is effected on the date of execution of the document, on the date of presentation for registration, or on the date of completion of registration.

Analysis: Section 45 of the Income-tax Act, 1961 taxes profits or gains arising from the transfer of a capital asset in the previous year in which the transfer took place. The expression "transfer" in section 2(47) is to be understood in the statutory sense, and the question is when the transfer becomes operative so that the transferor's rights are extinguished and the transferee's rights are created. Section 47 of the Registration Act, 1908 gives a registered document operation from the time it would have commenced to operate if registration had not been required, and the decisions relied upon show that registration relates back to the date of execution where the document is later duly registered. The Court held that, for the purpose of section 45, the decisive date is the date of execution of the document and not the date of presentation or completion of registration.

Conclusion: The transfer of immovable property of the value exceeding Rs. 100 is effected on the date of execution of the document, and the answer is in favour of the Revenue.

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