Development rights without transfer of possession do not trigger capital gains transfer under section 2(47)(v).

A development agreement granting the developer only development rights, buyer identification powers and sale-term control did not amount to a transfer of land under section 2(47)(v) where the owner retained possession and the final authority to execute sale deeds. The land was also found to be held as stock in trade throughout, and section 2(47) applies to capital assets; on those facts, the agreement could not be treated as a transfer of the land. The addition based on transfer was therefore unsustainable, and the Revenue's appeal was dismissed.

---

---

Issues: Whether, on the terms of the development agreement, the subject land was transferred so as to attract section 2(47)(v) of the Income-tax Act, 1961, and whether the land, being held as stock in trade, could be treated as a capital asset for that purpose.

Analysis: The agreement showed that the developer was given the right to develop the land, identify buyers and fix sale terms, but the assessee retained ownership and the final authority to execute sale deeds in favour of the buyers. The factual finding of the first appellate authority, affirmed by the Tribunal, was that possession of the land was not transferred and only development rights were granted. It was also found that the land had been treated as stock in trade throughout, and section 2(47) applies to capital assets. On those facts, the Tribunal's view that the transaction did not amount to a transfer of the land within the meaning of section 2(47)(v) was held to be correct.

Conclusion: The addition made by treating the development agreement as a transfer of land was not sustainable, and the Revenue's challenge failed.

Final Conclusion: No substantial question of law arose for interference, and the Revenue's appeal was dismissed.

Ratio Decidendi: Where land is held as stock in trade and the owner retains possession and the decisive authority to convey title, a development agreement granting only development rights does not amount to a transfer under section 2(47)(v) of the Income-tax Act, 1961.

---