Sec. 2(47)(v): Mere execution of a development agreement is not a “transfer” if possession as per s. 53A of the Transfer of Property Act is not given

CIT vs. Sadia Shaikh (Bombay High Court At Goa)

Sec. 2(47)(v): Mere execution of a development agreement is not a “transfer” if possession as per Sec. 53A of the Transfer of Property Act is not given


Though the development agreement was executed in AY 2003-04, the possession as contemplated in Section 53A of the Transfer of Property Act was in fact not handed over by the assessee to the developer. The agreement only permitted the development to be carried out by the said developer.

The entire control over the property was in fact with the assessee inasmuch as the licence to construct the property was also in the name of the assessee and the occupancy certificate was also given to the assessee. Therefore the execution of the agreement could not amount to transfer as contemplated under Section 53A of the Transfer of Property Act. The agreement was subsequently specifically modified and the assessee was liable to pay the capital gain as per the last agreement i.e. for assessment year 2008-09.

See also General Glass 108 TTJ 854 (Mum) & Fibars Infratech (ITAT Hyd) where Chaturbhuj Dwarakadas Kapadia 260 ITR 491 (Bom) is explained/ distinguished. Contrast with Charanjit Singh Atwal (ITAT Chd)