Unregistered joint development agreement cannot trigger deemed transfer under capital gains law without compliance with part performance requirements.

An unregistered joint development agreement executed after the amendments to section 53A of the Transfer of Property Act and sections 17(1A) and 49 of the Registration Act could not satisfy the statutory requirements for part performance. As the contract was not registered, the deeming fiction in section 2(47)(v) of the Income-tax Act was not triggered, even though a power of attorney was executed and possession was allegedly handed over. On that basis, the alleged transfer of development rights did not amount to a taxable transfer in the relevant year, and the capital gains addition was not sustainable.

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Issues: Whether an unregistered joint development agreement, coupled with a power of attorney and alleged handing over of possession, amounted to a transfer attracting capital gains tax under section 2(47)(v) read with section 45 of the Income-tax Act, 1961.

Analysis: The agreement was executed after the amendments to section 53A of the Transfer of Property Act, 1882 and sections 17(1A) and 49 of the Registration Act, 1908. For section 53A to apply, the contract for transfer of immovable property for consideration must be in writing, signed, and registered where required; an unregistered contract executed after the amendment does not have effect for section 53A. Since the joint development agreement was admittedly unregistered, the statutory conditions for invoking part performance were not satisfied. In the absence of compliance with section 53A, the deeming fiction in section 2(47)(v) could not be triggered. On that basis, the alleged transfer of development rights and possession did not amount to a taxable transfer in the relevant year.

Conclusion: The unregistered joint development agreement did not constitute a transfer under section 2(47)(v), and the addition made as capital gains was not sustainable.

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