Capital gains accrual depends on transfer completion and right to receive consideration, not later payment or conveyance execution.

Capital gains under section 12B accrued when a transfer was effected and the right to receive consideration arose, not when payment was actually received or a later registered conveyance was executed. Applying that test, the agreement for sale, delivery of possession, and the assessee-company's treatment of the assets in its books showed that the transaction was completed in the relevant accounting year under the mercantile system. The amount was therefore properly brought to tax as capital gains in the assessment year 1948-49, and the Revenue succeeded.

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Issues: Whether the sum of Rs. 79,494 was assessable as capital gains in the assessment year 1948-49.

Analysis: Capital gains under section 12B of the Indian Income-tax Act were chargeable where the gain arose from a sale, exchange, relinquishment or transfer effected before 1 April 1948. The assessee followed the mercantile system of accounting, and the agreement for sale, possession of the assets, and the company's treatment of the assets in its books showed that the transaction had been completed in the relevant accounting year. Actual payment of the consideration and subsequent execution of a registered conveyance for immovable property were held not to postpone the accrual of the gain, because what mattered was the right to receive the price and the completion of the transfer in substance.

Conclusion: The sum of Rs. 79,494 was rightly assessable as capital gains in the assessment year 1948-49, and the answer was in favour of the Revenue.

Ratio Decidendi: For capital gains under section 12B, the decisive test is when the transfer is effected and the right to receive the consideration accrues, not when the consideration is actually received or when the formal conveyance is later executed.

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