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Alapati Venkataramiah vs Commissioner Of Income Tax Hyderabad on 29 March, 1965 cites

Commissioner Of Income-Tax vs Bhurangya Coal Co. on 23 September, 1958

Even if the agreement was accepted by the company in 1949, the question still remains whether any sale or transfer of assets took place before April 1948. Sale or transfer of an asset could take place, as it did in respect of the site, even before the agreement was L/P(N)4SCI-10 574 accepted. The assets comprised of two items of immovable property, viz., Plant and machinery valued at Rs. 15,989/- and site and buildings valued at Rs. 1,26,470/-. It is clear that title to these assets could not pass to the company till the conveyance was executed and registered. (See Commissioner of Income Tax v. Bhurangva Coal Co.(1) No such conveyance was executed before April 1, 1948. It is only on November 22, 1948, that a sale deed was executed and registered in respect of the site. Therefore, it is clear that the title to these assets did not pass to the company till after April 1, 1948, and consequently nO sale took place of these assets before April 1, 1948. Mr. Rajagopala Sastri however urges in the alternative that even if no sale took place before April 1, 1948, the assets had been transferred to the company before that date. He says that 'transfer' is a wide word' and had been used in s. 12B to cover those cases where rights in assets have been transferred in such a manner as to give rise to capital gains. He further urges that in this case possession of the assets was transferred' to the company on March 17, 1948, and the assessee could never get back possession of the immovable assets in view of s. 53A of the Transfer of Property Act. In none of the cases cited before us has this point been considered. We are unable to sustain this contention. Before s. 12B can be attracted, title must pass to the company by any of the modes mentioned in s. 12B, i.e. sale, exchange or transfer. It is true that the word 'transfer' is used in addition to the word 'sale' but even so, in the context transfer must mean effective conveyance of the capital asset to the transferee. Delivery of possession of immovable property cannot by itself be treated as equivalent to conveyance of the immovable property. The High Court has relied on the entries made in the account books of the assessee and the company on March 20, 1948, but the date of sale or transfer according to s. 12B is the date when the sale or transfer takes place, and it seems to us that the entries in the account books are irrelevant for the purpose of determining such a date. Mr. Rajagopala Sastri contends that the assessee should not be allowed at this stage to draw a distinction between movable and immovable assets, but in the statement of the case, which was agreed to by the assessee and' the Revenue, a distinction is drawn thus:
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