Joint development agreement did not trigger capital gains where section 53A requirements and registration were not satisfied.

A joint development agreement did not amount to a transfer for capital gains purposes because the arrangement envisaged only pro rata transfer of land and did not give possession in part performance of the entire property. Any possession was treated as a licence for development, not as transferee possession under section 53A of the Transfer of Property Act, 1882. As the post-24.09.2001 agreement was unregistered, the essential requirements of section 53A were not met, so section 2(47)(v) of the Income-tax Act, 1961 did not apply. On that basis, no taxable transfer arose and the section 54F exemption issue became academic.

---

---

Issues: Whether, on the facts of a joint development agreement, there was a "transfer" attracting capital gains under section 2(47)(v) of the Income-tax Act, 1961 read with section 53A of the Transfer of Property Act, 1882, and whether the connected claim for exemption under section 54F survived for consideration.

Analysis: The agreement was read along with the subsequent sale deeds and it was found that the arrangement contemplated only pro rata transfer of land. No possession of the entire land had been delivered in part performance so as to attract section 53A of the Transfer of Property Act, 1882. Any possession, if given, was only as a licensee for development and not as transferee. Since the agreement executed after 24.09.2001 was unregistered, the essential requirements of section 53A were not satisfied and, therefore, section 2(47)(v) of the Income-tax Act, 1961 did not apply. In view of the conclusion on transfer, the exemption issue under section 54F did not require separate adjudication.

Conclusion: No taxable transfer arose under section 2(47)(v), and the assessee was not liable to capital gains tax on the remaining land. The exemption issue was rendered academic.

Ratio Decidendi: For section 2(47)(v) to apply, the transaction must satisfy all essential ingredients of section 53A of the Transfer of Property Act, 1882, including valid possession in part performance and, where applicable, registration of the development agreement.

---