Indexation for capital gains follows proved possession under part-performance, not later formal registration.

Possession of immovable property under an agreement to sell, supported by a registered power of attorney and contemporaneous records such as electricity and house tax entries, was treated as effective ownership for indexation purposes. Because the assessee proved possession and enjoyment from 1997, the Tribunal accepted that date as the relevant starting point for capital gains indexation, rather than the later 2003 registration date. The Revenue's reliance on formal registration was rejected, and the addition made by the Assessing Officer was held unsustainable.

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Issues: Whether the assessee was entitled to compute indexation for capital gains from 1997, when possession was handed over under the agreement to sell and related documents, or only from 2003, when the flat was registered in the assessee's name.

Analysis: The assessee produced the agreement to sell, registered power of attorney, evidence of electricity connection in his name, and house tax records to show that possession and effective enjoyment of the flat had been with him from 1997. The Revenue's stand rested on the fact that formal registration occurred only in 2003. The Tribunal held that, on the undisputed facts, the assessee had established possession from 1997 and that the earlier date had to be accepted for granting the indexation benefit. The Tribunal applied the legal effect of transfer in part performance and treated the assessee as being in possession of the flat since 1997.

Conclusion: The assessee was entitled to indexation from 1997, not from 2003, and the addition made by the Assessing Officer was not sustainable.

Ratio Decidendi: Where possession of immovable property is proved to have been handed over under an agreement to sell supported by registered transactional documents and contemporaneous indicia of ownership, the effective date for indexation purposes follows the date of possession and transfer in part performance, not the later date of formal registration.

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