Transfer under part performance completed on possession and agreement; later sale deed did not trigger fresh capital gains tax.

Transfer of the property was completed in 1991 when the agreement to sell was executed and possession had already been delivered, so the transaction fell within section 2(47)(v) of the Income-tax Act read with section 53A of the Transfer of Property Act. The later sale deed executed in 2009 did not amount to a fresh transfer in the assessee's hands because the assessee acted only as a general power of attorney holder for the original owner. On that basis, section 50C could not be applied to tax capital gains in the year under consideration, and the long-term capital gains addition was deleted.

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Issues: Whether the transfer of the property took place in 1991 on execution of the agreement to sell and delivery of possession, or in 2009 when the sale deed was executed by the assessee as a power of attorney holder, and whether section 50C could be applied to tax capital gains in the year under consideration.

Analysis: The assessee had entered into an agreement to sell in 1987, delivered possession, and thereafter executed an agreement to sell in 1991 in favour of the buyer, who also confirmed possession and purchase in response to the Assessing Officer's enquiry. The sale deed executed in 2009 showed that the assessee acted only as a general power of attorney holder for the original owner, and not as owner selling the property afresh. The facts satisfied the concept of transfer under section 2(47)(v) of the Income-tax Act, read with section 53A of the Transfer of Property Act, because possession had been taken in part performance and continued with the transferee. Since the transfer was complete in 1991, the later execution of the sale deed in 2009 did not create a fresh taxable transfer in the assessee's hands, and section 50C was not attracted.

Conclusion: The transfer was completed in 1991, not in 2009. The addition made as long-term capital gains was not sustainable and was directed to be deleted.

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