In Brief
A housing society and its members entered into an unregistered Joint Development Agreement (JDA) in 2007 with developers for land development. The tax authorities taxed capital gains on the transaction, but the developers never obtained regulatory approvals and the project fell through. The Supreme Court held that an unregistered JDA cannot be a valid 'transfer' under the Income Tax Act because post-2001 law requires such agreements to be registered. Additionally, no capital gains tax can be levied on income from a transaction that never materialized; mere contingent rights dependent on unobtained permissions do not constitute accrued or receivable income taxable under Sections 45 and 48 of the Income Tax Act. The appeals were dismissed.
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