Joint development agreements can trigger transfer and capital gains on full accrued consideration, including flats, despite non-registration.

A joint development arrangement was treated as a transfer where the developer obtained effective possession and control through an irrevocable special power of attorney and the parties' conduct, bringing the transaction within sections 2(47)(v) and 2(47)(vi) even though the arrangement was unregistered. Capital gains were held taxable in the year of transfer on the full consideration accruing under sections 45 and 48, including the value of proposed flats and not merely cash actually received. Reopening under sections 147 and 148 was also sustained on the basis of material indicating escapement of income, and later cancellation claims or the plea of notional income did not defeat the charge.

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Issues: (i) Whether reassessment under sections 147 and 148 was valid. (ii) Whether the amounts arising from the joint development agreement were chargeable to capital gains in the relevant year under sections 2(47)(v) and 2(47)(vi), and whether the full consideration, including the value of the proposed flats, was taxable.

Issue (i): Whether reassessment under sections 147 and 148 was valid.

Analysis: The challenge to reopening was treated as identical to the earlier batch of cases and was examined on the same footing. The reassessment was sustained where the reopening was based on material showing escapement of income and was not invalid merely because the assessee disputed the merits of the capital-gains addition.

Conclusion: The reopening was held valid and the issue was decided against the assessee.

Issue (ii): Whether the amounts arising from the joint development agreement were chargeable to capital gains in the relevant year under sections 2(47)(v) and 2(47)(vi), and whether the full consideration, including the value of the proposed flats, was taxable.

Analysis: The agreement, read with the irrevocable special power of attorney and the surrounding conduct of the parties, was held to confer upon the developer possession and effective control sufficient to amount to a transfer within section 2(47)(v). The non-registration of the arrangement did not prevent application of that provision. The transaction was also brought within section 2(47)(vi) because it enabled enjoyment of immovable property through the society-members arrangement. For capital gains, sections 45 and 48 required the full value of consideration received or accruing to be brought to tax in the year of transfer, and the consideration included not only the cash component but also the vested right to receive flats. Subsequent cancellation assertions, the plea of notional income, and the argument that only amounts actually received could be taxed were rejected. The claim for exemption under section 54F did not alter the chargeability of the gain.

Conclusion: The capital-gains additions were sustained and the issue was decided against the assessee.

Final Conclusion: The common order upheld the reassessment and sustained the capital-gains taxation on the basis that the joint development arrangement effected a transfer in the relevant year and the entire accrued consideration was taxable; only the revenue's appeal in one connected matter succeeded, while the assessee appeals failed.

Ratio Decidendi: In a joint development arrangement, where the developer is given effective possession and control through an irrevocable arrangement and the assessee acquires an enforceable right to receive consideration in cash and kind, the transaction constitutes a transfer under section 2(47)(v)/(vi), and capital gains are chargeable on the full consideration received or accruing in the year of transfer, irrespective of non-registration or later cancellation claims.

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