Capital gains transfer under section 2(47)(v) can arise on possession and part performance, not later clearance.

Reassessment beyond four years was sustained because the recorded reasons relied on later verification of the No Objection Certificate and were treated as sufficient to invoke reopening jurisdiction, even though the issue had been examined earlier. On capital gains, the Tribunal held that transfer occurred when the agreements to sell were acted upon, possession was handed over, substantial consideration was received, and the transaction satisfied section 2(47)(v) read with section 53A; the later Chapter XX-C clearance did not defer that date. As the investment in the new property fell outside the permitted time window, deduction under sections 54 and 54F was denied.

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Issues: (i) Whether reassessment initiated beyond four years was valid in the absence of failure by the assessee to disclose fully and truly all material facts; (ii) whether the transfer of the property for the purpose of capital gains and deduction under sections 54 and 54F took place on 28.11.1999 or only on 21.02.2000 after the final No Objection Certificate, and whether the assessee was entitled to the claimed deduction.

Issue (i): Whether reassessment initiated beyond four years was valid in the absence of failure by the assessee to disclose fully and truly all material facts.

Analysis: The reassessment was founded on the later verification of the No Objection Certificate issued by the Appropriate Authority and on the consequent conclusion that the earlier allowance of deduction had been granted on an incorrect premise. The original assessment record did not disclose this aspect in the manner required for the Revenue's objection, and the reopening was not treated as barred merely because the matter had earlier been examined in assessment proceedings. The Tribunal held that the recorded reasons were sufficient to sustain jurisdiction under the reassessment provisions.

Conclusion: The reassessment was held valid, in favour of the Revenue.

Issue (ii): Whether the transfer of the property for the purpose of capital gains and deduction under sections 54 and 54F took place on 28.11.1999 or only on 21.02.2000 after the final No Objection Certificate, and whether the assessee was entitled to the claimed deduction.

Analysis: The Tribunal treated the agreements to sell, the handing over of possession, receipt of substantial consideration, and the surrounding conduct of the parties as constituting a transfer within the meaning of section 2(47)(v) read with section 53A of the Transfer of Property Act. It further held that the Chapter XX-C clearance process did not postpone the effective date of transfer for capital gains purposes, and that the later No Objection Certificate related back to the earlier composite transaction. On that footing, the investment in the Bangalore property was outside the permissible time window for relief under sections 54 and 54F.

Conclusion: The assessee was held not entitled to deduction under sections 54 and 54F, in favour of the Revenue.

Final Conclusion: The appeal succeeded on both the jurisdictional and substantive issues, and the order granting relief to the assessee was set aside.

Ratio Decidendi: For capital gains purposes, a transfer is complete when the statutory conditions of part performance and possession are satisfied, and a later clearance under Chapter XX-C does not postpone that transfer where the transaction is otherwise complete in substance.

Concurring Opinion: Abraham P. George, JM (Third Member) agreed that reopening was valid and that the assessee's right to deduction depended on the effective transfer date, but differed from the Judicial Member by holding that the earlier agreement and possession brought the transaction within section 2(47)(v), with the later No Objection Certificate relating back to the original composite transaction.

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