Capital gains on joint development agreements arise on completion certificate issuance, not on mere possession or transfer-related events.

In a joint development arrangement, capital gains are chargeable in the previous year in which the competent authority issues the completion certificate for the project, or the relevant part of it, under section 45(5A) of the Income-tax Act, 1961. The assessee's receipt of the constructed portion and earlier possession did not override this statutory timing rule, so taxation in the assessment year under consideration was upheld. The provision fixes the year of charge by reference to completion certification, not mere transfer-related events.

---

---

Issues: Whether capital gains arising from transfer of property under a joint development arrangement were chargeable in the assessment year under consideration under section 45(5A) of the Income-tax Act, 1961.

Analysis: Section 45(5A) provides that capital gains are chargeable as income of the previous year in which the certificate of completion for the whole or part of the project is issued by the competent authority. The assessee had received the constructed portion of the developed property and the completion certificate had not been obtained when possession was given. The contention that the property was dealt with earlier did not displace the statutory timing rule for taxation under the special provision governing development agreements.

Conclusion: The capital gain was rightly taxed in the year under consideration, and no substantial question of law arose.

Ratio Decidendi: In a joint development agreement, capital gains are chargeable in the year in which the competent authority issues the completion certificate for the project or relevant part of it, as mandated by section 45(5A) of the Income-tax Act, 1961.

---