Registered property transfer fixes capital-gains timing despite deferred consideration, while post-sale family settlements cannot reduce recorded owner liability.

A registered agreement conclusively transferring rights in immovable property fixes the year of transfer for capital-gains purposes under sections 45(1) and 2(47)(i), notwithstanding deferred receipt of sale consideration and delivery of possession. Taxes paid, collected or deducted in the subsequent assessment year in relation to the transaction must be credited against the liability for the relevant year of transfer. A post-sale family settlement cannot reduce the recorded owner's taxable capital gain where other family members lacked pre-existing legal title, relinquishment, partition or contemporaneous evidence of ownership; distribution of proceeds remains an internal post-sale arrangement.

---

---

Issues: (i) Whether the transfer of the immovable property and the resulting long-term capital gains were taxable in Assessment Year 2016-17 despite substantial sale consideration and delivery of possession occurring in the succeeding year; and (ii) whether the assessee's taxable share of the sale consideration was limited to 25.65% by a subsequent family settlement.

Issue (i): Whether the transfer of the immovable property and the resulting long-term capital gains were taxable in Assessment Year 2016-17 despite substantial sale consideration and delivery of possession occurring in the succeeding year.

Analysis: Under Section 45(1) read with Section 2(47)(i) of the Income-tax Act, 1961, the registered agreement to sell executed on 28 March 2016 concluded the transfer during the previous year relevant to Assessment Year 2016-17. Receipt of the substantial balance consideration and delivery of possession in Assessment Year 2017-18 did not defer the date of transfer or the year of taxability. Section 2(47)(v), concerning possession in part performance, did not alter the result because the registered sale agreement had already brought the transaction within the statutory meaning of transfer. Taxes paid, collected, or deducted in Assessment Year 2017-18 in relation to the same transaction were directed to be given credit while computing the liability for Assessment Year 2016-17.

Conclusion: The capital gains were taxable in Assessment Year 2016-17, with corresponding credit allowed for taxes paid, collected, or deducted in Assessment Year 2017-18.

Issue (ii): Whether the assessee's taxable share of the sale consideration was limited to 25.65% by a subsequent family settlement.

Analysis: The registered agreement described the assessee as the vendor and absolute owner entitled to transfer the property, while the other family members were only confirming parties without right, title, or interest. The Memorandum of Family Settlement was executed after the sale and was unsupported by prior legal title, relinquishment, partition, or contemporaneous evidence establishing an earlier division of ownership. Subsequent distribution of sale proceeds therefore constituted an internal post-sale arrangement and did not reduce the capital gains assessable in the assessee's hands.

Conclusion: The assessee was liable to be assessed on the entire capital gain and not merely on 25.65% of the sale consideration.

Final Conclusion: The transfer and the entire resulting capital gain were retained in Assessment Year 2016-17 in the assessee's hands, while the related tax credit from Assessment Year 2017-18 was preserved.

Ratio Decidendi: For capital-gains purposes, a registered agreement that conclusively transfers rights in immovable property determines the year of transfer notwithstanding deferred receipt of consideration or possession, and a subsequent family arrangement cannot displace the recorded owner's liability absent pre-existing legal title in the other claimants.

---