Capital gains on registered property transfer arise in the year of transfer, even if full consideration is received later.

Registered transfer of immovable property was treated as complete in the year the sale deed was executed and registered, where revenue records also showed transfer of possession and mutation in the buyer's name before year-end. A cancellation clause tied to dishonour of an undated cheque was treated as a protective stipulation and not as postponing the transfer. The buyer's affidavit and the contention that the transaction was complete only on encashment of the cheque were rejected. Capital gains were therefore chargeable in the year of transfer, not merely when full consideration was received, and the entire gain was taxable in assessment year 2007-08.

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Issues: Whether the entire sale consideration arising from the registered sale deed was taxable as capital gains in assessment year 2007-08 despite the balance consideration being covered by an undated cheque and the deed containing a cancellation clause on dishonour.

Analysis: The sale deed was executed and registered on 20.03.2007 and the revenue records showed transfer of possession and mutation in the buyer's name before the close of the year. The clause providing for cancellation on dishonour of the cheque was treated as a protective stipulation and not as postponing the transfer itself. The assessee's reliance on the buyer's affidavit and the plea that the transaction was complete only on encashment of the cheque was rejected in view of the registered deed and surrounding facts. The Tribunal held that the evidence did not establish that no transfer had taken place in the relevant year and that capital gains are chargeable in the year of transfer, not merely on the date of receipt of the entire consideration.

Conclusion: The transfer was held to have taken place in assessment year 2007-08 and the entire capital gain was held taxable in that year; the assessee's challenge failed.

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