Section 54EC exemption depends on the wider meaning of transfer, not only the sale deed date.

Section 54EC relief could not be denied on the narrow footing that transfer occurred only on execution of the registered sale deed. The wider definition of "transfer" under section 2(47), including transactions in part performance under section 53A of the Transfer of Property Act, applied to the assessee's agreement for sale and advance receipt, where the capital gains were invested in specified bonds within the relevant period. The revisional authority's rigid interpretation under section 263 was therefore unsustainable, and the assessee remained entitled to the section 54EC exemption.

---

---

Issues: Whether the revisional order under section 263 was justified in holding that exemption under section 54EC was unavailable because investment in specified bonds was made on the basis of an agreement and advance received before execution of the sale deed.

Analysis: The assessee had entered into an agreement for sale, received advance consideration, and invested the amount in specified bonds within the relevant period. The factual basis of the transaction was not in dispute. For section 54EC, the expression "transfer" cannot be confined only to the date of execution of the sale deed when the Income-tax Act itself gives a wider meaning to transfer under section 2(47), including transactions falling within part performance under section 53A of the Transfer of Property Act, 1882. On that construction, investment made pursuant to an agreement and advance receipt could not be treated as non-compliance merely because the formal deed was executed later. The revisional authority therefore proceeded on an unduly rigid view of the provision and the order was not sustainable.

Conclusion: The invocation of section 263 was unjustified and the assessee was entitled to the benefit of section 54EC.

Ratio Decidendi: Where the assessee has invested capital gains in specified assets pursuant to an agreement and advance receipt, the term "transfer" in section 54EC must be read in light of the wider definition in section 2(47) and the doctrine of part performance, and revision under section 263 cannot be sustained on a narrow literal view that limits transfer only to the date of the registered sale deed.

---