Capital gains transfer under development agreements depends on actual handing over of possession and control, not powers of attorney alone.

For section 2(47)(v) of the Income-tax Act, a transfer of immovable property under a development arrangement occurs only when possession and complete control are actually handed over in part performance of the contract under section 53A of the Transfer of Property Act. Earlier powers of attorney that merely describe the owner as being in possession do not, by themselves, create a taxable transfer. On the facts noted, the agreement and the assessee's own reply showed that possession had not been given earlier and only limited access for work was permitted, so the transfer was taken to have occurred only in assessment year 2002-03.

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Issues: Whether the transfer of the immovable property within the meaning of section 2(47)(v) of the Income-tax Act, 1961 took place only on execution of the agreement dated 30 April 2001 so as to attract capital gains in assessment year 2002-03.

Analysis: The Power of Attorney documents of 1993 and 1994 did not show that possession had been handed over to the developer. On the contrary, they described the assessee as owner in possession. The agreement dated 30 April 2001 again recorded that the assessee was the owner in possession. The assessee's own reply to the notice under section 148 stated that possession had not been given, only access was allowed for carrying out work, and that no transfer had taken place earlier. Applying the principles governing section 2(47)(v) and section 53A of the Transfer of Property Act, the relevant date is the date on which possession and complete control are actually handed over under the development arrangement.

Conclusion: The transfer was rightly held to have occurred only in assessment year 2002-03, and the Tribunal's finding was neither illegal nor perverse.

Ratio Decidendi: For section 2(47)(v), transfer occurs when the development arrangement results in handing over possession and complete control of the property in part performance of the contract; earlier powers of attorney that do not transfer possession do not by themselves create a taxable transfer.

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