Deemed transfer of development rights brought capital gains under section 50C despite municipal records remaining unchanged.

Transfer of development rights under a development agreement was treated as a deemed transfer because possession was given to the developer against consideration and the arrangement satisfied part performance under section 53A of the Transfer of Property Act, bringing it within section 2(47)(v) of the Income-tax Act. Continued municipal record ownership in the assessee's name did not alter that legal character. On the capital gains computation, the stamp valuation adopted for section 50C was not found infirm, as the Departmental Valuation Officer had already considered the relevant factors.

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Issues: Whether section 50C of the Income-tax Act, 1961 applies to transfer of development rights under a development agreement and whether the transfer was a deemed transfer under section 2(47)(v) read with section 53A of the Transfer of Property Act, 1882.

Analysis: The development agreement showed transfer of possession to the developer against consideration, and the transaction satisfied the conditions of part performance contemplated by section 53A of the Transfer of Property Act, 1882. Once those conditions were met, the transaction fell within the deeming fiction of section 2(47)(v) of the Income-tax Act, 1961. The fact that the property continued in municipal records in the assessee's name did not alter the legal character of the transaction. The valuation made by the Departmental Valuation Officer had already taken the relevant factors into account, and no infirmity was found in the adoption of the stamp valuation for computing capital gains.

Conclusion: Section 50C was held applicable, and the assessee's challenge to the capital gains computation failed.

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