TMI Blog1993 (8) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... ind Ghanekar to his wife, Premabai, inter vivos were 'revocable transfers' within the meaning of section 61 read with section 63 of the Income-tax Act, 1961 ?" The assessee is a body of individuals comprising Mr. and Mrs. Govind B. C. Ghanekar. They are governed by the Portuguese Civil Code. Mr. Ghanekar had gifted in favour of his wife, Mrs. Premabai, a sum of Rs. 5 lakhs which was deposited in her name on August 31, 1961, with one Mr. Modu Timble. Mr. Ghanekar also gifted Rs. 90,000 to his wife on February 1, 1962, out of which she purchased certain properties and shares. She was enjoying the properties with absolute right. There was no written document of gift. The Income-tax Officer did not accept the alleged gifts. In the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Tribunal, therefore, observed that the gifts were revocable gifts under the Portuguese Civil Code. The Tribunal, however, held that this fact was irrelevant for the purpose of deciding the applicability of section 61 of the Income-tax Act. The Tribunal discussed the provisions of sections 61 and 63 of the Income-tax Act and held that gifts revocable under the Portuguese Civil Code did not fall within the ambit of section 61 of the Income-tax Act. Hence this reference at the instance of the Revenue. Learned counsel for the Revenue submits that the Tribunal misconstrued and misinterpreted section 61 read with section 63 of the Incometax Act. According to learned counsel, a gift which is revocable by the operation of law is also revocab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) it, in any way, gives the transferor a right to reassume power directly or indirectly over the whole or any part of the income or assets; (b) `transfer' includes any settlement, trust, covenant, agreement or arrangement. On a conjoint reading of sections 60, 61, 62 and 63, it is abundantly clear that the income from revocable transfers of assets is to be included in the hands of the transferor for the purpose of charge of income-tax. What is a revocable transfer will depend on various factors including, of course, the operation of law. If the law itself provides that a certain transfer shall be revocable, it cannot be held to be irrevocable with reference to the provisions of section 63 of the Act. Section 63 specifies certain sit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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