Indian Kanoon - Search engine for Indian Law

Supreme Court of India

Commissioner Of Income-Tax, Andhra ... vs T.N. Arvinda Reddy on 5 October, 1979

Equivalent citations: 1980 AIR 96, 1980 SCR (1) 872, 1980 TAX. L. R. 20, 1979 (4) SCC 721, (1979) 2 CURTAXREP 423, (1979) 2 TAXMAN 541, (1979) 6 TAX LAW REV 262 (SC), (1980) 1 SCJ 202, (1979) 120 ITR 46, 66 TAXATION 47, (1980) 1 I T J 113, 1980 UJ(SC) 83, (1980) 1 SCR 872 (SC), (1980) 1 ANDHWR 38, 1980 SCC(TAX) 39, AIR 1980 SUPREME COURT 96, 1979 4 SCC 721, 1980 (1) SCR 872, 1979 (120) ITR 46, 1980 (1) SCJ 202, 1980 (1) ITJ 113, 1980 SCC (TAX) 39, 56 TAXATION 47, 1980 UJ (SC) 83

Author: V.R. Krishnaiyer

Bench: V.R. Krishnaiyer, D.A. Desai

           PETITIONER:
COMMISSIONER OF INCOME-TAX, ANDHRA PRADESH

	Vs.

RESPONDENT:
T.N. ARVINDA REDDY

DATE OF JUDGMENT05/10/1979

BENCH:
KRISHNAIYER, V.R.
BENCH:
KRISHNAIYER, V.R.
DESAI, D.A.

CITATION:
 1980 AIR   96		  1980 SCR  (1) 872
 1979 SCC  (4) 421


ACT:
     Income-tax	 Act-1961  Section  54(1)-Scope	 of-Words  &
Phrases-Purchase-Meaning of.



HEADNOTE:
     The respondent  sold his house at a price sufficient to
attract capital	 gins but he pre-empted the demand of tax by
acquiring  the	 common	 house	 from  his  brothers  for  a
consideration of  Rs 30,000/-  each through separate release
deeds. On  behalf of  the Petitioner,  it was contended that
release deeds by sharers in favour of one of them amounts to
purchase within	 the meaning  of s.  54 (1)  of the Act. The
High Court  having held	 it is,	 the Revenue  came by way of
Special Leave.
     Dismissing the Petition,
^
     HELD: Each	 release is  a transfer	 of  the  releaser's
share for  consideration to  the release.  In plain English,
the transferee	purchases the  share of each of his brothers
for a  price. Had  this been taken from non-fraternal owners
of shares  or from  one stranger  owner, plain spoken people
would have  called it a purchase. The reason is supported by
decision in Hobshaw Brothers Ltd. v. Mayer, [1956(3) AER 833
and 835] that purchase primarily means acquisition for money
paid, not  adjusted. There  is	no  reason  to	divorce	 the
ordinary meaning  of the word 'purchase' as buying for price
or equivalent  of price	 by payment  in kind  or  adjustment
towards an old debt or for other monetary consideration from
the legal  meaning of that word in s. 54(1) of the Act. [873
B-D]



JUDGMENT:

CIVIL APPELLATE JURISDICTION: Special Leave Petition (Civil) No. 1557 of 1979.

From the Judgment and Order dated 1-2-1978 of the Andhra Pradesh High Court in Case Referred No. 114 of 1976.

Soli J. Sorabji, Solicitor General and Miss A. Subhashini for the petitioner.

S.T. Desai, K. J. John and A. K. Verma for the Respondent.

The order of the Court was delivered by KRISHNA IYER, J. -We regard the single point, persuasively presented by the learned Solicitor General on behalf of the petitioner (The Commissioner of Income Tax, Andhra Pradesh), as deserving of a speaking order, although in dissent, since the question may arise again and needs to be silenced.

Briefly, the facts. Four brothers, members of a coparcenery, partitioned their family properties, leaving in common a large house in the occupation of their mother. The eldest, who is respondent before us, sold his own house at a price sufficient to attract handsome capital gains tax, but he pre-empted the demand for tax by acquiring the common house from his three brothers who executed three release ,, deeds for a consideration of Rs. 30,000/- each, adjusted towards the extra share (Jeshtabhaga) agreed to be given to the eldest by the next three. It is common ground that if these release deeds did .. amount to purchase of the house, s. 54(1) of the Income Tax Act, 1961, would save the respondent from exigibility to tax. So the short question, neatly identified by the learned Solicitor General is whether release deeds by sharers in favour of one of them whereby the joint ownership of all became separate ownership of one amount to purchase of house property within the meaning of s. 54(1) of the Act. The High Court has held it is and we concur. Undoubtedly, each , release, in these circumstances, is a transfer of the releaser's share for consideration to the release. In plain English, the transferee purchases the share of each of his brothers. It is for a price of i Rs. 30,000/- each. Had this been taken from non-fraternal owners of shares or from one stranger- owner, plain-spoken people would have called it a purchase. Why, then, should legalist be allowed to play this linguistic distortion. The reason, supposedly supported by an English decision, is that purchase primarily means acquisition for money paid, not adjusted Upjohn, J. in Habshaw Brothers Ltd. v. Mayer has circumspectly said :

There are no doubt to be found authorities and statutes which have extended that meaning. In Mr. T. Cyprian Williams book, the Contract of Sale of Land, at p. 3 he says: "'sale', in the strict and primary sense of the word, 'means' an agreement for the conveyance of property for a price in money; but the word 'sale' may be used in law in a wider sense and so applied to the conveyance of land for a price consisting wholly or partly of money's worth other than the conveyance of some other land."

Apparently he considered that a sale for something other than money can in a wider sense be properly described as a sale.

We agree. The signification of a word of plural semantic shades may, in a given text, depend on the pressure of the context or other indicia. Absent such compelling mutation of sense, the speech of the lay is also the language of the law.

We find no reason to divorce the ordinary meaning of the word 'purchase' as buying for a price or equivalent of price by payment ill kind or adjustment towards an old debt or for other monetary consideration from the legal meaning of that word in Sec. 54 (1). If you sell your house and make a profit, pay Caesar what is due to him. But if you buy or build another subject to the conditions of Sec. 54(1) you are exempt. The purpose is plain; the symmetry is simple, the language is plain. Why mutilate the meaning by lexical legalism. We see no stress in the section on 'cash and carry'. The point pressed must, therefore, be negatived. We have declined lo hear Sri S. T. Desai's artillery fire although he was armed cap a pie with Mitakshara lore and law. A point of suffocating scholarship sometimes arrives in court when one nostaligically remembers the escapist verse:

"Where ignorance is bliss, "Tis folly to be wise."

Amen ! A passing reference to avoidance and evasion of tax was made at the bar, a dubious refinement of a dated legal culture sanctified, though, by judicial dicta. The court is not the mint of virtue and one day in our Welfare State geared to Social Justice, this clever concept of 'avoidance' against 'evasion' may have to be exposed. Enough unto the day is the evil thereof.

N.K.A. Petition dismissed.