Completed land transfer governs capital gains despite later settlement; subsequent cancellation affects only the portion actually altered.

Capital gains on the transfer of 50 acres were treated as taxable in assessment year 2010-11 because the transfer was already complete in financial year 2009-10: the agreement to sell had been acted upon, registered conveyances were executed, consideration was received, and possession was delivered. A later arbitration award cancelling the arrangement did not undo the completed transfer for capital gains purposes. The later settlement was given effect only to the extent of the land not ultimately conveyed under the subsequent sale deeds, which was treated as a deemed buy-back on the date of the award, while the common lands remained part of the original transfer.

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Issues: Whether capital gains arising from the transfer of 50 acres of land in financial year 2009-10 were chargeable in assessment year 2010-11 notwithstanding a later arbitration award cancelling the agreement and substituting fresh conveyances in financial year 2015-16.

Analysis: The transfer of 50 acres was held to be complete in financial year 2009-10 because the agreement to sell, registered conveyances, receipt of consideration, and delivery of possession had all taken place in that year. The later arbitration award did not undo the completed transfer for tax purposes. Instead, full effect was given to the award by treating the portion of land not ultimately transferred under the later sale deeds as a deemed buy-back on the date of the award, while recognising that the common lands conveyed in both sets of deeds remained part of the original transfer.

Conclusion: The capital gain on the original transfer was taxable in assessment year 2010-11 and the assessee's challenge failed.

Final Conclusion: The appeal was rejected, with the original transfer held taxable in the earlier assessment year and the later settlement treated only to the extent necessary to give effect to the arbitration award.

Ratio Decidendi: A completed transfer accompanied by execution of sale deeds, receipt of consideration, and delivery of possession cannot be displaced for capital gains purposes by a subsequent settlement or cancellation; the later arrangement can operate only to the extent of its actual effect on the transferred subject-matter.

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