Capital gains on agricultural land cannot be taxed twice when transfer by part performance was completed earlier.

Long-term capital gain on agricultural land could not be taxed again in the assessee's hands where the transfer had already occurred under an earlier agreement to sell through part performance and possession had been handed over after contractual and land-related obstacles were cleared. The later registered sale deed merely completed the transaction chain already initiated, while the balance consideration had been accounted for and taxed in the hands of the confirming parties and co-owners. On these facts, double taxation of the same sale consideration in the assessee's hands was unwarranted, and the addition was rightly deleted.

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Issues: Whether the addition of long-term capital gain on the sale of agricultural land was justified in the assessee's hands for the year under appeal.

Analysis: The land was first dealt with under an earlier agreement to sell, under which the assessee and the co-owner had received consideration and handed over possession to the confirming parties after the contractual and land-related obstacles were cleared. The transaction thus answered the statutory description of transfer by part performance, attracting the charging provisions for capital gains in the earlier year when possession was given. The later registered sale deed executed in favour of third-party purchasers only completed the chain of transactions initiated earlier, and the balance consideration was received and offered to tax by the confirming parties in their respective returns. The same sale consideration had already been accounted for among the co-owners and confirming parties, so taxing the entire consideration again in the assessee's hands was unwarranted.

Conclusion: The addition of long-term capital gain in the assessee's hands was not sustainable and was rightly deleted.

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