Transfer date for tax purposes follows execution of a registered conveyance when consideration and possession were completed earlier.

A compulsorily registrable conveyance is treated, for determining the year of transfer, as operating from the date of execution where execution, full consideration, stamp duty payment and possession all occurred in the earlier financial year. Applying section 47 of the Registration Act, 1908, the transfer was held to have been completed in financial year 2010-11, so section 50C could not be invoked in assessment year 2012-13. The reopening challenge was not separately decided because it became academic after relief on merits.

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Issues: Whether the addition under section 50C of the Income-tax Act, 1961 could be brought to tax in assessment year 2012-13 when the conveyance deeds were executed, consideration was received, stamp duty was paid and possession was handed over in financial year 2010-11, though the deeds were registered on 27.04.2011.

Analysis: The conveyance deeds showed execution on 30.12.2010, simultaneous payment of stamp duty, handing over of possession and receipt of full consideration in financial year 2010-11. The Court applied the principle that, for a compulsorily registrable document, the registered instrument operates from the date of execution and not merely from the date of registration. Relying on the governing interpretation of section 47 of the Registration Act, 1908 and the earlier view that the transfer is to be regarded as completed on execution for tax purposes, the Court held that the relevant transfer had taken place in the preceding year.

Conclusion: The addition under section 50C could not be made in assessment year 2012-13 and was deleted.

Final Conclusion: The appeal succeeded on merits and the reopening issue was not adjudicated independently because it became academic.

Ratio Decidendi: A compulsorily registrable conveyance operates, for purposes of determining the year of transfer, from the date of execution where execution, consideration and possession are complete, and not merely from the date of registration.

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