Timing of immovable property transfer under anti-abuse valuation rules depends on legal completion, not an unsupported unregistered deed.

Timing of transfer of immovable property governed the applicability of section 56(2)(vii)(b)(ii). The unregistered sale deed and claimed presentation for registration did not establish completion of transfer in the earlier year because possession and legally effective registration were not shown to have occurred then. The transaction was also treated as lacking genuineness, as only a small part of the consideration had been paid, no written or registered contract supported the asserted earlier transfer, and the surrounding conduct was inconsistent with an arm's length sale. On that basis, the deeming provision applied in the relevant assessment year and the addition was sustained.

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Issues: (i) Whether the assessee's acquisition of immovable property was a transfer in the previous year relevant to assessment year 2014-15 so as to attract section 56(2)(vii)(b)(ii) of the Income-tax Act, 1961; (ii) Whether the transaction reflected in the sale deed was genuine and could be treated as completed on the date of presentation for registration notwithstanding partial payment and delayed registration.

Issue (i): Whether the assessee's acquisition of immovable property was a transfer in the previous year relevant to assessment year 2014-15 so as to attract section 56(2)(vii)(b)(ii) of the Income-tax Act, 1961.

Analysis: The relevant transfer was not accepted as having been completed on the earlier date of presentation for registration. The unregistered sale deed could not, in the facts, establish completion of transfer or delivery of possession in the earlier year, and the transaction was held to have culminated only on registration in the relevant year. On that footing, the deeming provision in section 56(2)(vii)(b)(ii) applied to the assessee's case.

Conclusion: The issue was decided against the assessee and in favour of the Revenue.

Issue (ii): Whether the transaction reflected in the sale deed was genuine and could be treated as completed on the date of presentation for registration notwithstanding partial payment and delayed registration.

Analysis: The Court found serious doubt about genuineness because only a small part of the agreed consideration had been paid, no written agreement or registered contract supported the asserted earlier transfer, and the surrounding conduct was inconsistent with an arm's length genuine sale. The legal effect of an unregistered document was also negatived in light of the registration requirements and the evidentiary consequences of non-registration and insufficient stamping. The transaction was therefore not treated as a completed genuine transfer in the earlier year.

Conclusion: The issue was decided against the assessee and in favour of the Revenue.

Final Conclusion: The impugned addition was upheld because the property transfer was held to have taken place in the relevant assessment year and the transaction was found not to be genuine on the claimed earlier date.

Ratio Decidendi: For the purpose of section 56(2)(vii)(b)(ii), the timing of transfer of immovable property depends on the legally effective completion of the transaction, and an unregistered or otherwise unsupported arrangement cannot displace the substantive finding that the transfer occurred only when registration and possession were legally effective.

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