Key Points from the Legal Document:

• The appellant, Smt. Rajshree Bihani, filed an appeal against the assessment order regarding her capital gains for the assessment year 2005-06, which was initially framed based on the sale of her 1/3rd undivided share in a land property at Netaji Subhash Chandra Bose Road, Tollygunge, Kolkata (!) .

• The core issue involves the timing of the transfer of property, the assessment of long-term capital gain, the applicability of section 50C, and the claim for exemption under section 54F of the Income Tax Act (!) .

• The appellant contended that the transfer was effected in the assessment year 2001-02, based on the agreement for sale, possession transfer, and partial consideration received during that period, thereby making the sale transaction liable to assessment in that earlier year (!) .

• The authorities below (AO and CIT(A)) held that the sale occurred in the assessment year 2005-06, primarily because the sale deed was executed in that year, and they invoked section 50C to determine the deemed sale consideration at a higher value, denying the exemption under section 54F (!) (!) .

• The legal position clarifies that under section 2(47)(v), a transfer includes any transaction involving allowing possession of immovable property to be taken or retained in part performance of a contract, as per provisions of the Transfer of Property Act, and that such transfer is effective from the date of the agreement and possession transfer, regardless of the formal registration or execution of sale deed (!) (!) (!) .

• The document emphasizes that the transfer in question was effected in the assessment year 2001-02, as the agreement for sale, possession transfer, and partial consideration occurred during that period, fulfilling the conditions of section 53A of the Transfer of Property Act (!) (!) (!) .

• It is clarified that section 50C, which pertains to deemed valuation based on stamp duty valuation, is applicable only from assessment year 2003-04 onwards and does not apply to earlier years such as 2001-02 (!) .

• Regarding the exemption under section 54F, the appellant had invested the sale proceeds in a residential flat purchased in the assessment year 2001-02, fulfilling the conditions for claiming exemption, including the requirement that the asset be a long-term capital asset and that the proceeds are invested within the prescribed period (!) (!) .

• The legal analysis confirms that the transfer was in part performance of a contract under section 53A, which confers a transfer date from the agreement and possession transfer, thereby making the transaction taxable in the earlier assessment year. The exemption under section 54F is accordingly allowable since the conditions are satisfied (!) (!) .

• The appeal was ultimately allowed, recognizing that the transfer was completed in the assessment year 2001-02, and the exemption under section 54F was rightly claimed for the investment in the residential flat (!) (!) .

• The document underscores the importance of the timing of transfer, possession, and agreement execution in determining the assessment year for capital gains, and clarifies that statutory provisions such as section 50C are applicable only from the specified assessment years onwards.