Unregistered joint development agreement cannot trigger deemed transfer under section 2(47)(v) without enforceable part-performance rights.

An unregistered joint development agreement and irrevocable power of attorney did not constitute a deemed transfer under section 2(47)(v) of the Income-tax Act because the arrangement failed the requirements of section 53A of the Transfer of Property Act. The developer had only limited possession for development, the assessee retained ownership and material control, development was not completed within the stipulated time, and no consideration accrued in the relevant year as contended by the Revenue. In the absence of a registered and legally enforceable contract, the agreement lacked efficacy for part-performance purposes. Capital gains could not therefore be taxed in the relevant assessment year, and the addition was deleted in favour of the assessee.

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Issues: Whether the execution of the joint development agreement and irrevocable power of attorney amounted to a transfer under section 2(47)(v) of the Income-tax Act, 1961 so as to attract capital gains in the relevant assessment year.

Analysis: The agreement gave the developer only limited possession for development, while the assessee continued to retain ownership and control for material purposes. The development was not completed within the stipulated time, no consideration accrued in the relevant year in the manner contended by the Revenue, and the agreement was not registered. For section 2(47)(v) to apply, the transaction must satisfy the ingredients of section 53A of the Transfer of Property Act, 1882, including an enforceable contract, possession in part performance, and willingness of the transferee to perform. In the absence of a registered and legally enforceable contract under the amended registration law, the arrangement did not have efficacy for section 53A purposes, and therefore could not constitute a deemed transfer.

Conclusion: The capital gain could not be brought to tax in the relevant assessment year on the basis of section 2(47)(v), and the deletion of the addition was upheld in favour of the assessee.

Ratio Decidendi: An unregistered joint development agreement that is not enforceable in law under section 53A of the Transfer of Property Act, 1882 cannot give rise to a deemed transfer under section 2(47)(v) of the Income-tax Act, 1961.

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