Unregistered leasehold assignment and deemed transfer under capital gains law cannot rest on section 53A after registration amendments.

An unregistered agreement assigning leasehold rights could not, after the 2001 amendments to section 53A of the Transfer of Property Act and sections 17 and 49 of the Registration Act, be treated as a contract enforceable under section 53A; accordingly, the deeming transfer under section 2(47)(v) of the Income-tax Act could not be invoked solely on that basis. The taxability of the rights actually transferred still required fresh factual examination, so the matter had to be reconsidered on the merits by the Assessing Officer. On that reasoning, the addition based on the lower authorities' approach was not sustainable.

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Issues: Whether the unregistered agreement assigning leasehold rights amounted to a transfer within the meaning of section 2(47)(v) of the Income-tax Act, 1961 read with section 53A of the Transfer of Property Act, 1882, so as to justify taxation of the consideration as capital gains.

Analysis: The assessee was only a lessee and had transferred its leasehold rights under an unregistered assignment agreement. After the 2001 amendments to section 53A of the Transfer of Property Act, 1882 and sections 17 and 49 of the Registration Act, 1908, an unregistered contract for transfer of immovable property has no effect in law for the purpose of section 53A. Since the agreement remained unregistered, it could not be treated as a contract enforceable under section 53A, and the deeming provision in section 2(47)(v) could not be applied on that basis. At the same time, the nature of the rights transferred and their taxability required fresh examination on the facts by the Assessing Officer.

Conclusion: The addition could not be sustained on the basis adopted by the lower authorities, and the issue was sent back for de novo consideration in accordance with law.

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