Capital gains on property transfer turn on the first agreement date and jantri value, with computation sent back for verification.

Capital gains on transfer of immovable property were examined by reference to the earlier agreement to sell and the later registered deed. The Tribunal accepted that an agreement to sell may create enforceable rights and, on the facts, transfer under section 2(47) could not be assessed only by the date of registration. It also noted that no higher consideration received by the assessee was shown. However, because the lower authority had not examined whether the jantri value or circle rate on the date of the first agreement exceeded the declared consideration, the computation required fresh verification. The matter was restored to the Assessing Officer for reconsideration of capital gain on that basis.

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Issues: Whether the capital gain from transfer of the immovable property was chargeable in the year of the registered sale deed or in the earlier year on the basis of the agreements to sell, and whether the sale consideration disclosed by the assessee could be disturbed without examining the jantri value under the statutory deeming provision.

Analysis: The assessee had entered into an earlier agreement to sell with the intermediary and a later tripartite arrangement under which the intermediary was recognised as a confirming party. The Tribunal accepted that an agreement to sell can create enforceable rights capable of specific performance and that, in the facts shown, the transfer under section 2(47) could not be tested only by reference to the later registration. It also noted that the assessee had received only the consideration agreed with the intermediary and there was no material to show receipt of any higher amount by the assessee. At the same time, the Tribunal found that the lower appellate authority had not examined whether the jantri value or circle rate prevailing on the date of the first agreement exceeded the declared consideration. In the absence of a finding on that aspect, the computation required fresh examination.

Conclusion: The matter was restored to the Assessing Officer to verify the jantri value on the date of the first agreement and to recompute the capital gain, if necessary, on that basis.

Final Conclusion: The assessee's substantive relief was not finally affirmed or denied on merits, and the capital-gain computation was left open for fresh determination on the limited remand issue.

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