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Issues: (i) Whether execution of an unregistered development agreement amounted to transfer of immovable property within the meaning of section 2(47)(v) of the Income-tax Act, 1961. (ii) Whether the arrangement resulted in transfer within the meaning of section 2(47)(vi) of the Income-tax Act, 1961.
Issue (i): Whether execution of an unregistered development agreement amounted to transfer of immovable property within the meaning of section 2(47)(v) of the Income-tax Act, 1961.
Analysis: Transfer under clause (v) is attracted only where the agreement is of the nature referred to in section 53A of the Transfer of Property Act and the statutory requirements for part performance are satisfied. After the 2001 amendment to the registration regime, an unregistered agreement cannot give rise to such transfer. The development agreement in question was unregistered, so the statutory condition for transfer was not met.
Conclusion: No transfer arose under section 2(47)(v); the issue was answered in favour of the assessee.
Issue (ii): Whether the arrangement resulted in transfer within the meaning of section 2(47)(vi) of the Income-tax Act, 1961.
Analysis: Clause (vi) applies where the arrangement enables enjoyment of immovable property as if the transferee were the owner in substance, even without a legal transfer of title. The agreement here granted only a limited licence to enter upon and develop the land, while possession remained with the owners and the agreement itself negated any grant of possession in part performance. On those facts, the developer did not obtain ownership-like enjoyment of the property.
Conclusion: No transfer arose under section 2(47)(vi); the issue was answered in favour of the assessee.
Final Conclusion: The appeal failed because the development agreement did not result in a taxable transfer in the relevant assessment year, and the connected questions on capital gains and conversion into stock-in-trade did not survive for decision.
Ratio Decidendi: For clause (v), an unregistered development agreement does not effect a transfer in part performance; for clause (vi), there must be a transaction conferring ownership-like enjoyment of the property, not a mere licence to develop.
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