Deemed transfer under section 2(47) fails where an unregistered arrangement is unenforceable and unimplemented.

An unregistered joint venture and share transfer arrangement did not amount to a transfer under section 2(47) because it had no legal efficacy under section 53-A of the Transfer of Property Act, 1882, read with the Registration Act, 1908. As the arrangement was not enforceable in law and was not implemented during the relevant financial year, and the necessary permissions, clearances and consideration were absent, there was neither an actual nor a deemed transfer. Any capital gain was therefore only hypothetical and not chargeable under sections 45 and 48 of the Income-tax Act, 1961.

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Issues: Whether the joint venture and share transfer arrangement, which remained unregistered and was not acted upon before the end of the relevant financial year, amounted to a transfer within the meaning of section 2(47) so as to attract capital gains tax.

Analysis: The arrangement was considered in the light of the statutory concept of transfer under section 2(47), including clauses dealing with parting with possession and enabling enjoyment of immovable property. The decisive factor was that the joint venture agreement was unregistered and had no efficacy in law for the purposes of section 53-A of the Transfer of Property Act, 1882, as read with the Registration Act, 1908. Without a contract enforceable in law and without the necessary permissions, clearances, consideration, or implementation during the relevant year, the transaction did not mature into an actual or deemed transfer. The resulting capital gain, if any, was only hypothetical and not chargeable under sections 45 and 48 of the Income-tax Act, 1961.

Conclusion: No transfer occurred during the relevant financial year and the proposed capital gains could not be brought to tax; the appeal failed.

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