High Court: Land possession transfer without ownership change or payment isn't a 'transfer' under Income Tax Act Section 2(47).

The HC held that handing over possession of land to a developer for construction purposes under a development agreement, without actual transfer of ownership or payment of consideration, does not constitute a 'transfer' u/s 2(47) of the Income Tax Act to attract capital gains tax. The performance guarantee amount is refundable and not consideration. The HC distinguished the cases of Potla Nageswara Rao and Arvind S Phake, where transfer was complete with possession handover and consideration payment. The Tribunal's finding that the assessee handed over full possession for 60% constructed area and was liable for capital gains during the relevant year was held perverse. .....

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