Deemed transfer under section 2(47)(v) requires readiness and willingness to perform; repeated default defeats taxability.

Section 2(47)(v) deems a transfer only where the underlying arrangement satisfies section 53A of the Transfer of Property Act, including the transferee's readiness and willingness to perform. Repeated defaults, requests for rescheduling, and failure to meet the stipulated payment schedule showed that this essential requirement was absent, so the arrangement could not be treated as a deemed transfer for the relevant year. The reopening under section 147 was also unsustainable because it rested on the same erroneous assumption that mere execution of the development arrangement and licence to enter the property was enough to trigger deemed transfer. Accordingly, the capital gains were not taxable in that assessment year and the reassessment basis failed.

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Issues: (i) Whether reassessment under section 147 was valid; (ii) whether capital gains arising from the transfer arrangement were taxable in the assessment year in question under section 2(47)(v).

Issue (i): Whether reassessment under section 147 was valid.

Analysis: The reopening was founded on the premise that the transaction amounted to a deemed transfer and that capital gains had escaped assessment. The recorded reasons disclosed factual inconsistencies and proceeded on an erroneous assumption that mere execution of the development arrangement and grant of licence to enter the property was enough to attract deemed transfer. The material on record showed repeated defaults by the transferee, repeated requests for rescheduling, and absence of performance in terms of the agreement. In these circumstances, the reopening could not rest on a legally sustainable basis.

Conclusion: The reassessment was invalid and is decided in favour of the assessee.

Issue (ii): Whether capital gains arising from the transfer arrangement were taxable in the assessment year in question under section 2(47)(v).

Analysis: Deemed transfer under section 2(47)(v) applies only where the contract is of the nature referred to in section 53A of the Transfer of Property Act, which requires, among other things, that the transferee has performed or is willing to perform the contract. The transferee's repeated defaults, requests for repeated rescheduling, and failure to honour the stipulated payment schedule showed that the essential requirement of readiness and willingness was absent. Since the contract did not satisfy section 53A, it could not be treated as a deemed transfer under section 2(47)(v) for the relevant year.

Conclusion: The capital gains could not be taxed in the assessment year in question and this issue is decided in favour of the assessee.

Final Conclusion: The addition based on deemed transfer failed, and the assessee succeeded on both the validity of reopening and the year of taxability.

Ratio Decidendi: Section 2(47)(v) is attracted only when the underlying arrangement satisfies section 53A of the Transfer of Property Act, including the transferee's unconditional readiness and willingness to perform; repeated default in performance prevents the arrangement from constituting a deemed transfer.

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