Accrual-Based Recognition governs stock-in-trade sales; later deed registration does not create tax liability if consideration and possession occurred earlier.

For units held as stock-in-trade, revenue recognition depends on accrual/receipt and delivery; registration of an assignment deed occurring after consideration was received and possession delivered earlier does not trigger taxation. The analysis applies the part-performance doctrine and commercial accounting principles, treating registration as non-essential where transfer tests and prior proceedings record accrual in an earlier year. An addition based solely on subsequent registration would permit double taxation and breach consistency and finality; accordingly the addition in the later assessment year is unsustainable and the revenue appeal is dismissed in favour of the assessee.

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Issues: Whether registration of an assignment deed in the impugned assessment year can trigger taxation of business income where consideration was received and possession handed over in an earlier financial year, in respect of units held as stock-in-trade.

Analysis: The factual matrix shows that the units were stock-in-trade, substantial consideration was received prior to the earlier financial year end, and possession was delivered in that earlier year. The impugned addition in the later assessment year rested solely on registration of an assignment deed that occurred subsequently. Principles applicable for stock-in-trade require revenue recognition on accrual/receipt and delivery consistent with commercial accounting practice. The part performance doctrine and the recognised test for transfer under the relevant statutory framework treat registration as not being a necessary precondition where consideration has been received and possession delivered earlier. Where prior proceedings have treated the transaction as occurring in the earlier year and no accrual or receipt occurred in the later year, invoking a later registration to tax the same receipts would permit double taxation and contravene the doctrine of consistency and finality.

Conclusion: The addition on account of sale of the units in the impugned assessment year is unsustainable; the registration of the assignment deed in the later year does not trigger taxation where consideration was received and possession handed over in an earlier year, and therefore the appeal of the revenue is dismissed (decision in favour of the assessee).

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