Part-performance transfer of immovable property treated as capital gains, not professional income, where possession passed under an enforceable arrangement.

Where possession of immovable property was handed over under an enforceable arrangement in part performance, the transaction fell within the inclusive definition of transfer under Section 2(47)(v) of the Income-tax Act read with Section 53A of the Transfer of Property Act. The agreement did not refer to the assessee's status as an advocate or show that the payment was for legal services; instead, it indicated that three grounds of land were to be transferred as consideration. The receipt was therefore assessable as capital gains and not as professional income, and the Revenue's appeal failed.

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Issues: Whether the consideration received by the assessee for transfer of three grounds of land was assessable as professional income or as capital gains.

Analysis: The agreement between the parties did not refer to the assessee's status as an advocate or indicate that the payment was for legal services. The arrangement showed that possession of the property was handed over for obtaining patta and layout, and that three grounds were to be transferred to the assessee as consideration. On these facts, the transaction attracted the inclusive definition of transfer under Section 2(47)(v) of the Income-tax Act, 1961, read with Section 53A of the Transfer of Property Act, 1882, because possession was given in part performance of the contract.

Conclusion: The receipt was rightly assessed as capital gains and not as professional income.

Final Conclusion: The Revenue's appeal failed, and the assessment had to proceed on the basis that the amount received represented capital gains arising from a transfer by part performance.

Ratio Decidendi: Where possession of immovable property is handed over under an enforceable arrangement in part performance of a contract, the transaction constitutes a transfer under Section 2(47)(v) of the Income-tax Act, 1961, and the resulting consideration is taxable as capital gains unless the payment is shown to be for professional services.

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