Commissioner Of Income-Tax vs Murarilal Budhia on 23 August, 1978
11. Actually, though applicability of Section 46(2) as such is not in dispute in this case and only the impact of Section 47(v) is viewed differently by the contending parties before us, a little deeper analysis of the four decisions (upholding levy under Section 46(2) would not be out of place. A careful study of those four decisions reveals that the main arguments of the respective assessees were on two points. One point was that transaction envisaged in Section 46(2) is not a transfer even within the extended meaning given to the word 'transfer' as per Section 2(47) of the IT Act and hence in spite of this specific provision of Section 46(2) capital gains cannot arise. As already noted, this argument was rejected not only in these four decisions which were against the assessees but also in the other two decisions in which the respective assessees had succeeded due to other attendant circumstances. In the four decisions which went against the respective assessees, yet another argument taken on behalf of the assessees was that Section 2(24) defines income wherein Clause (vi) says that 'capital gains chargeable under Section 45' would be included in income and the argument was that if Section 46(2) was a charging section independent of Section 45 the omission to mention Section 46(2) separately in Section 2(24) should result in relief to the assessee. Actually, it is for repelling this argument that different decisions had adopted different lines of argument. More particularly, some of them have said that definition of income in Section 2(24) is merely inclusive and not exhaustive while others have said that Section 46(2) in spite of being a charging Section "the receipt is deemed to arise from the transfer of a capital asset which squarely falls within the purview of Section 45 of the Act" (refer Murarilal Budhia's case (supra).