Capital gains on immovable property arise on registered conveyance dates, and section 54EC relief follows each deed separately.

Transfer of immovable property for capital gains purposes was held to occur on execution and registration of the individual sale deeds, not on mere receipt of full consideration or asserted handing over of possession, because part performance under section 53A of the Transfer of Property Act was not established. Capital gains were therefore linked to the respective registration dates. Applying the six-month investment period under section 54EC sale deed-wise, exemption was confined to the capital gains arising from the four sale deeds dated 23.03.2004. The other sale deeds fell outside the statutory time limit, and the assessment had to be reworked accordingly.

---

---

Issues: (i) Whether capital gains arose on the receipt of full consideration and alleged handing over of possession, or only on registration of the individual sale deeds for purposes of assessment year and exemption under section 54EC; (ii) Whether the assessee was entitled to exemption under section 54EC in respect of all the sale deeds or only those falling within the statutory time limit.

Issue (i): Whether capital gains arose on the receipt of full consideration and alleged handing over of possession, or only on registration of the individual sale deeds for purposes of assessment year and exemption under section 54EC.

Analysis: The agreement with the builder contemplated transfer through the execution of sale deeds and handing over of vacant possession on receipt of the balance consideration. The Court found no reliable basis to treat mere receipt of full consideration as completing the transfer. In the absence of proven part performance attracting section 53A of the Transfer of Property Act, 1882, the transfer of the immovable property, for tax purposes, was complete only when the registered sale deeds were executed. Accordingly, capital gains had to be linked to the respective dates of registration of the sale deeds.

Conclusion: Capital gains arose on the dates of registration of the individual sale deeds, not merely on receipt of the full consideration or on the asserted earlier handing over of possession.

Issue (ii): Whether the assessee was entitled to exemption under section 54EC in respect of all the sale deeds or only those falling within the statutory time limit.

Analysis: Since the transfer was held to occur on the respective dates of registered conveyance, the six-month period for investment under section 54EC had to be computed sale deed-wise. On that footing, only the capital gains relatable to the sale deeds executed on 23.03.2004 fell within the eligible period. The remaining sale deeds, executed earlier, did not qualify for exemption. The matter therefore required re-working of the liability by the Assessing Officer.

Conclusion: Exemption under section 54EC was available only in respect of the four sale deeds dated 23.03.2004, and not for the other sale deeds.

Final Conclusion: The appeals were disposed of with a limited allowance in favour of the assessee, and the assessment was directed to be re-computed accordingly.

Ratio Decidendi: For capital gains and section 54EC purposes, transfer of immovable property is complete on execution and registration of the conveyance deed unless part performance under section 53A of the Transfer of Property Act, 1882 is established; the exemption period must then be computed with reference to the individual registered transfer dates.

---