Capital gains transfer date depends on part-performance possession, not the later sale deed, for long-term treatment.

For capital gains purposes, transfer of immovable property can occur when possession is delivered in part performance of a qualifying contract under section 2(47)(v) of the Income-tax Act, 1961 read with section 53-A of the Transfer of Property Act, 1882. The later execution of a formal sale deed is not ative if the earlier lease-cum-sale agreement and possession already fixed the transfer date. Applying that principle, the gain was correctly treated as long-term capital gain rather than short-term capital gain, and the Tribunal's view was upheld.

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Issues: Whether the transfer of the site took place on the date of the lease-cum-sale agreement and delivery of possession so as to treat the later sale as giving rise to long-term capital gains, and whether the Tribunal was right in holding that short-term capital gains did not arise.

Analysis: The lease-cum-sale agreement was executed in 1981, possession was delivered in part performance, and the assessee's rights were examined in the light of clause (v) of section 2(47) of the Income-tax Act, 1961 and section 53-A of the Transfer of Property Act, 1882. The Court found that the Tribunal had correctly applied the principles governing transfer of immovable property and the computation of the holding period for capital gains. The later execution of the absolute sale deed by the BDA was treated as not decisive for determining whether the asset was long-term or short-term in the assessee's hands.

Conclusion: The Tribunal was right in holding that the gain was assessable as long-term capital gain and not as short-term capital gain.

Final Conclusion: The revenue's appeal failed, and the Tribunal's relief in favour of the assessee was left undisturbed.

Ratio Decidendi: For capital gains purposes, where possession is delivered in part performance of a qualifying contract, the transfer date is determined by section 2(47)(v) of the Income-tax Act, 1961 read with section 53-A of the Transfer of Property Act, 1882, and not merely by the date of the later formal sale deed.

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