Capital gains on mining lease rights arise only on registered conveyance; leasehold mining rights qualify as capital assets.

Leasehold rights in mines were treated as a capital asset because property of any kind falls within the statutory definition unless expressly excluded, and such rights were neither stock-in-trade, personal effects nor agricultural land. The sale was held to occur only on execution and registration of the sale deed, because the agreement to sell was conditional on title approval, governmental sanction and further transfer formalities and did not itself convey title. For capital gains purposes, the assessable gain arose when the transfer was completed by the registered conveyance.

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Issues: (i) Whether leasehold rights in mines constituted a capital asset within the meaning of the capital gains provision; (ii) Whether the sale was effected on the date of the agreement to sell or only on execution and registration of the sale deed.

Issue (i): Whether leasehold rights in mines constituted a capital asset within the meaning of the capital gains provision.

Analysis: Property of any kind held by an assessee falls within the definition of capital asset unless it comes within the statutory exclusions. Leasehold rights in mines were not stock-in-trade, personal effects, or agricultural land, and they were connected with the assessee's business. They were therefore within the statutory description of capital asset.

Conclusion: The issue was answered in favour of the Revenue and against the assessee.

Issue (ii): Whether the sale was effected on the date of the agreement to sell or only on execution and registration of the sale deed.

Analysis: The agreement itself was subject to approval of title, governmental sanction, and further transfer formalities, and it did not by itself convey title. The expression used in the charging provision was sale effected, which required an actual transfer by a properly executed and registered instrument. The doctrine of part performance did not determine the date of sale for this purpose, because it does not perfect title without a completed conveyance.

Conclusion: The sale was effected only on execution and registration of the sale deed, and the issue was answered against the assessee.

Final Conclusion: The transaction fell within the capital gains provision, and the assessable gain arose only when the transfer was completed by the registered sale deed.

Ratio Decidendi: For capital gains purposes, a transaction is a sale only when title is conveyed by a duly executed and registered instrument, and leasehold mining rights are capital assets unless they fall within a statutory exclusion.

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