Registered sale deed prevails over conflicting agreement to sell for capital gains timing; fair market value remitted for fresh determination.

For capital gains purposes, the transfer date was taken from the registered sale deed rather than an earlier notarized agreement to sell, because the deed recorded delivery of possession and was preferred over conflicting unsupported assertions. Capital gains were therefore taxable in the relevant assessment year. On the separate valuation issue, the adopted fair market value as on 01/04/1981 was found to lack adequate basis, and the matter was remitted for fresh determination after allowing the assessee to produce evidence.

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Issues: (i) Whether capital gains arising from the transfer of the immovable property were assessable in the relevant assessment year on the basis of the registered sale deed date, or whether the earlier agreement to sell and alleged handing over of possession displaced that date; (ii) Whether the fair market value of the property as on 01/04/1981 required fresh determination.

Issue (i): Whether capital gains arising from the transfer of the immovable property were assessable in the relevant assessment year on the basis of the registered sale deed date, or whether the earlier agreement to sell and alleged handing over of possession displaced that date.

Analysis: The agreement to sell and the registered sale deed contained inconsistent versions regarding delivery of possession. The Tribunal preferred the registered sale deed executed before the statutory authority, in which possession was recorded as having been delivered on the date of execution. The notarized agreement, being unsupported by equivalent evidentiary weight and contradicted by the record, was not accepted in preference to the registered conveyance. On that basis, the transfer was held to have occurred on the sale deed date for capital gains purposes.

Conclusion: The issue was decided against the Assessee and capital gains were held taxable in the relevant assessment year.

Issue (ii): Whether the fair market value of the property as on 01/04/1981 required fresh determination.

Analysis: The Tribunal found that the assessee had not specifically raised this objection before the lower authorities, but the rate adopted by the Assessing Officer lacked an adequate basis. The valuation material relied upon by the assessee related to another property and could not be accepted as conclusive. In the interest of justice, the matter was remitted for a fresh determination of fair market value as on 01/04/1981 after giving the assessee an opportunity to adduce evidence.

Conclusion: The issue was decided in favour of the Assessee and restored to the Assessing Officer for fresh adjudication.

Final Conclusion: The appeal succeeded only on the valuation issue, while the capital gains year of taxability was upheld; the matter was otherwise concluded by partial relief to the Assessee.

Ratio Decidendi: For capital gains purposes, a registered sale deed carrying a declaration of possession will prevail over a conflicting notarized agreement to sell, and the valuation issue may be remitted where the adopted fair market value lacks proper basis.

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