Unregistered development agreements do not trigger transfer under Section 2(47)(v) unless Section 53A requirements are met.

An unregistered joint development agreement cannot be treated as a transfer under Section 2(47)(v) of the Income-tax Act unless it creates a legally enforceable part-performance arrangement under Section 53A of the Transfer of Property Act. After the 2001 amendments to the Registration Act and the Transfer of Property Act, a contract intended to operate under Section 53A must be registered; an unregistered agreement has no legal efficacy for that purpose. Clauses dealing with possession do not change this position. The principle applied is that capital gains consequences under Section 2(47)(v) depend on a valid, registered contract capable of attracting Section 53A.

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Issues: Whether an unregistered joint development agreement could be treated as a transfer under Section 2(47)(v) of the Income-tax Act, 1961 so as to attract capital gains liability.

Analysis: Section 2(47)(v) brings within the scope of "transfer" a transaction where possession of immovable property is allowed to be taken or retained in part-performance of a contract of the nature referred to in Section 53A of the Transfer of Property Act, 1882. After the 2001 amendments to the Registration Act, 1908 and the Transfer of Property Act, a contract intended to operate under Section 53A must be registered, and an unregistered agreement has no efficacy in law for that purpose. The agreement in question was admittedly unregistered, and the clauses relating to possession did not alter the legal position. The principle applied by the Supreme Court in Balbir Singh Maini governed the controversy.

Conclusion: The unregistered agreement could not be treated as a transfer under Section 2(47)(v), and the capital gains addition could not stand.

Ratio Decidendi: For Section 2(47)(v) to apply, the underlying contract must be legally enforceable under Section 53A of the Transfer of Property Act, 1882, which requires registration where mandated by the Registration Act, 1908.

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