TMI Blog2015 (8) TMI 567X X X X Extracts X X X X X X X X Extracts X X X X ..... mpensation under the relevant enactments, the Bombay High Court in Akber A. Dehgamwalla's case (1991 (4) TMI 37 - BOMBAY High Court) explained the distinction as under : "It is only the amount of compensation that is to be determined later on after taking into account various relevant aspects. In the case of damages for breach of contract, there is no vested right as such. Breach of contract gives merely a right to sue which right is certainly not an "asset" within the meaning of section 2(e) of the Act." The amount involved in this case is the one referable to the Act.If a mere right to receive the compensation that may be enhanced may tend to become the one, equivalent to damages. The reason is that one cannot take the enhancement of compensation for granted. Several factors surround it and it is only on a case being made out, that the court can enhance the compensation. Had the applicant gifted the mere right to receive a probable enhanced compensation, things would have been different altogether. By the time he created the trust deed, the compensation stood already enhanced in the year 1974. What was gifted to the trust was the compensation enhanced in the O. P. The only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 1,000 initially and made a provision for transfer of the amount receivable under the decree passed in O. P. No. 59 of 1971 and the further appeal that may arise out of it. The Government filed A. S. No. 56 of 1978 feeling aggrieved by the enhancement of the compensation by the trial court. It is important to note that the trust got itself impleaded in A. S. No. 56 of 1978. On the basis of the interim orders passed in the appeal, a sum of ₹ 4,00,000 was deposited by the Government. The appeal was ultimately allowed in part on December 23, 1982, by reducing the market value to ₹ 10 per square yard. Between April 25, 1976, and April 25, 1977, the applicant received ₹ 4,00,000 towards enhanced compensation and he is said to have passed on to the trust, only on April 4, 1983. In the return filed for the assessment year 1983-84, the applicant reflected the amount of compensation but pleaded that he is not liable to pay tax since it has been passed on to the trust. The Assessing Officer did not accept the contention. According to him, the very disposition made under the trust is untenable in law since it was in respect of an amount, which was very much i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to acknowledge it in the context of levying Income-tax. He submits that both the questions referred to this court deserve to be answered in favour of the applicant. He places reliance upon the judgments of the Supreme Court in Mrs. Khorshed Shapoor Chenai v. Asst. CED [1980] 122 ITR 21 (SC), CWT v. Smt. Anjamli Khan [1991] 187 ITR 345 (SC), that of the Bombay High Court in Akber A. Dehgamwalla v. CWT [1992] 195 ITR 17 (Bom) and that of the Karnataka High Court in C. N. Nagakumar v. CWT [1992] 195 ITR 844 (Karn). Learned standing counsel for the Department, on the other hand, submits that it is only an amount, which is definite and available at the relevant point of time, that can be gifted and not something, which is uncertain. He submits that what was gifted by the applicant to the trust was not the amount of compensation but only the one which is the subject matter of an O. P. and further appeal and such parcels cannot be gifted at all. He submits that all the authorities under the Act have taken a correct view of the matter and both the questions deserve to be answered against them. On the merits also, learned counsel submits that though the gift is said to have been made i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he amount of compensation received in the form of enhancement. The Assessing Officer as well as the Commissioner and the Tribunal took the view that the gift of an amount, which is not determined could not have been made at all. In this regard, focusing of attention to certain basic of law becomes necessary. The Transfer of Property Act deals with the gifts pertaining not only to immovable properties but also movable properties. Section 122 takes in its fold both the categories of properties and it reads as under : 122. 'Gift' defined.-'Gift' is the transfer of certain existing movable and immovable property made voluntarily and without consideration, by one person, called the donor, to another, called the donee, and accepted by or on behalf of the donee. Section 123 prescribes the procedure to be followed for making gift of immovable property on the one hand and immovable property on the other hand. The movable property takes in its fold not only the tangible items but also the intangible ones. Section 130 of the Transfer of Property Act provides for transfer of actionable claims also. That expression is defined under section 3 of that enactment as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se under the Estate Duty Act. The Supreme Court took the view that the compensation for the land, which is acquired under the Act cannot be treated as part of estate of an assessee, and his right to receive compensation at market value as on the date of notification that may accrue to him can certainly be treated as a property, that would pass on, on his death. In other words, the right to receive compensation was treated as an item of property. Similar view was expressed in Smt. Anjamli Khan's cases (supra). Therefore, the view taken by the Assessing officer, the Commissioner and the Tribunal in the instant case that the right to receive enhanced compensation could not have been gifted, does not accord with law. We hold that the arrangement made under the gift deed was legal and valid and there is nothing unnatural about it. However, the undisputed facts disable the applicant from getting any relief. It has already been mentioned that the enhanced compensation of about ₹ 4,00,000 was received by the applicant between April 26, 1976, and April 25, 1977. Had he passed on that amount instantly to the trust, the amount would have become the corpus of the trust. Since t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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