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[2007] 294 ITR 196 [2007] 164 TAXMAN 108 (AAR - NEW DELHI) AUTHORITY FOR ADVANCE RULINGS, NEW DELHI Jasbir Singh Sarkaria, In re.* JUSTICE P.V. REDDI, CHAIRMAN and A. Sinha, Member A.A.R. NO. 724 OF 2006 AUGUST 30, 2007 Section 2(47), read with section 45, of the Income-tax Act, 1961 - Capital gains - Transfer - Assessment year 2007-08 - Whether actual receipt of entire sale consideration during year of transfer of a capital asset is not necessary for purpose of computing capital gains under section 45 - Held, yes - Whether where agreement for transfer of immovable property by itself does not provide for immediate transfer of possession, date of entering into agreement cannot be considered to be date of transfer within meaning of sub-clause (v) of section 2(47) - Held, yes - Whether to attract sub-clause (v) of section 2(47) it is not necessary that entire sale consideration up to last instalment should be received by owner - Held, yes - Whether once it is held that transaction of nature referred to in sub-clause (v) of section 2(47) has taken place on a particular date, actual date of taking physical possession need not be probed into; it is enough if transferee has, by virtue of that transaction, a right to enter upon and exercise acts of possession effectively - Held, yes Interpretation of statute : Principle of purposive construction. FACTS The appellant, an American citizen, co-owned some agricultural land in India along with his brother and sister. They, having decided to develop the land by constructing a residential complex thereon, entered into a collaboration agreement with a developer on 8-6-2005. According to the terms of the agreement, the developer should obtain the Letter of Intent (LoI) from the concerned Government Department and other permissions/sanctions for developing the land at its own risk and cost. On fulfilment of the requirements laid down in the LoI, owners will have to execute irrevocable General Power of Attorney in favour of developer. The developer will have 84 per cent share of the entire built up area and the proportionate land area whereas the owners' share will be 16 per cent. Subsequently, an agreement styled as…

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