Capital gains transfer date turns on execution, not registration, where a registered sale deed operates retrospectively.

For capital gains computation under section 45, the transfer of immovable property was treated as taking place on the date the sale deed was executed, not on the later date of registration. The reasoning was that section 47 of the Registration Act gives a registered document retrospective operation from the date it would have commenced to operate if registration had not been required, so registration does not postpone transfer. Authorities dealing with unregistered instruments and gift-tax cases were distinguished as inapplicable. The reassessments based on capital gains from the impugned transfers were therefore set aside.

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Issues: Whether, for assessment of capital gains under section 45, the transfer of immovable property takes place on the date of execution of the sale deed or on the date of its registration.

Analysis: The effective date of transfer was held to relate back to the date of execution of the sale deed. The decision proceeded on the footing that section 47 of the Registration Act gives the registered document operation from the date it would have commenced to operate if registration had not been required, so the later registration does not postpone the transfer for capital gains purposes. Authorities dealing with situations where no registered instrument existed during the relevant year were distinguished, and the differing approach in gift-tax cases was treated as inapplicable to the charging language of section 45.

Conclusion: The transfer of the immovable property occurred on the date of execution and not on the date of registration, so the capital gains could not be brought to tax in the assessment year under consideration.

Final Conclusion: The reassessments based on capital gains from the impugned transfers were set aside and the assessees succeeded.

Ratio Decidendi: For capital gains under section 45, an immovable property transfer effected by a registered sale deed is effective from the date of execution, not the date of registration, because registration operates retrospectively under section 47 of the Registration Act.

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