Capital gains on transfer require possession and part performance; absence of both defeated assessment of long-term gains.

For capital gains to arise on an alleged transfer, the transaction had to satisfy the requirements of section 2(47)(v) of the Income-tax Act, read with part performance under section 53A of the Transfer of Property Act. Because possession of the immovable property was not handed over, only a small part of the agreed consideration was received, and the balance amount was never realised, the essential elements of a transfer were not established. Long-term capital gains were therefore not assessable in the assessee's hands for the relevant year, and the addition was deleted.

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Issues: Whether long-term capital gains could be assessed in the assessee's hands for the relevant assessment year on the basis of the deed of assignment dated 11.12.2007, when possession of the property was not handed over and the balance consideration was not realised.

Analysis: The operative test was whether the transaction amounted to a transfer within section 2(47)(v) of the Income-tax Act, 1961, read with the principle of part performance under section 53A of the Transfer of Property Act, 1882. The Tribunal noted that only a small part of the agreed consideration had been received, the post-dated cheque for the balance amount was never encashed, and possession of the immovable property remained with the assessee. In these circumstances, the essential requirements for treating the transaction as a transfer giving rise to capital gains were not satisfied.

Conclusion: Long-term capital gains were not assessable in the assessee's hands for the relevant year, and the addition was deleted.

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