Deemed transfer under capital gains law requires part performance, possession and proper registration before tax can be imposed.

A sale agreement, agency agreement and general power of attorney do not amount to a deemed transfer under Section 2(47)(v) of the Income-tax Act unless the arrangement satisfies Section 53-A of the Transfer of Property Act, including delivery of possession in part performance. Where the documents do not record that possession was handed over and the sale agreement is not registered as required by Section 17(1-A) of the Registration Act, the transaction cannot be treated as a transfer for capital gains purposes. On that basis, the capital gains addition could not be sustained, and the assessment and appellate orders were set aside for fresh consideration in accordance with law.

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Issues: Whether the sale agreement, agency agreement and general power of attorney executed by the assessee amounted to a transfer within the meaning of Section 2(47)(v) of the Income-tax Act, 1961 so as to attract capital gains tax.

Analysis: For the deeming provision in Section 2(47)(v) to apply, the transaction must satisfy the requirements of part performance under Section 53-A of the Transfer of Property Act, 1882, including delivery of possession in pursuance of the contract. The documents relied upon did not contain any recital showing that possession had been handed over in part performance. The sale agreement was also not registered as required by Section 17(1-A) of the Registration Act, 1908, which further negatived the claim that the arrangement constituted a transfer for tax purposes.

Conclusion: The documents did not constitute a transfer under Section 2(47)(v) of the Income-tax Act, 1961, and the addition of capital gains tax on that basis could not be sustained.

Final Conclusion: The assessment and appellate orders were quashed and the matter was sent back for fresh consideration in accordance with law.

Ratio Decidendi: A transaction is not a deemed transfer under Section 2(47)(v) unless the contractual arrangement satisfies the requirements of part performance, including delivery of possession, and the relevant document complies with the registration requirement where applicable.

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