Capital gains transfer under Section 2(47) can arise on possession and power of attorney, not only later sale deed registration.

Capital gains purposes under the Income-tax Act treat transfer as occurring when an agreement, delivery of possession, and a registered power of attorney together enable enjoyment and effective control of immovable property. The Madras HC's analysis stated that Section 2(47)(v) and Section 2(47)(vi), read with Explanation 2, widen the meaning of transfer beyond the later execution of a sale deed. Because consideration was received and possession was handed over earlier, the transfer was treated as completed in the earlier year, and the later registration was not the sole transfer event.

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Issues: Whether capital gains arose in assessment year 2010-11, or whether the transfer was complete in assessment year 2009-10 under Section 2(47)(v) and Section 2(47)(vi) of the Income-tax Act, 1961, having regard to the agreement for sale, possession, power of attorney arrangement, and the registration requirement under the Transfer of Property Act, 1882.

Analysis: The transfer question was not confined to Section 2(47)(v) alone. The Court held that sub-clauses (v) and (vi) of Section 2(47), read with Explanation 2, widen the concept of transfer to include transactions by which possession is given or enjoyment of immovable property is enabled by agreement or arrangement. The assessee had received consideration, handed over possession, and executed a registered power of attorney enabling effective control over the property. The agreement for sale could not be viewed in isolation, and the Tribunal erred in treating the later registered sale deed as the only transfer event. The CBDT circular was also relied upon to support the enlarged meaning of transfer for power of attorney arrangements.

Conclusion: The transfer took place in the earlier year and the capital gains were not taxable in assessment year 2010-11 on the basis adopted by the Tribunal; the issue was decided in favour of the assessee.

Ratio Decidendi: For capital gains purposes, a transaction effecting transfer or enabling enjoyment of immovable property through agreement, possession, and irrevocable power of attorney falls within Section 2(47)(v) and Section 2(47)(vi) of the Income-tax Act, 1961, even if the formal sale deed is executed later.

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