TMI Blog1978 (2) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. He, therefore, treated the difference of a sum of Rs. 46,126 in the value of those shares on the basis of the balance-sheet of the company and the price charged as capital gains, which amounted to Rs. 7,417 already declared by the assessee and included the remaining amount of Rs. 38,709 in the assessment. The assessee preferred an appeal to the AAC. The AAC agreed with the ITO and upheld the addition. The assessee, thereafter, preferred a second appeal before the Tribunal. The Tribunal did not go into the question as to whether s. 47(iii) of the I.T. Act, 1961, contemplated a gift as defined in the Transfer of Property Act or a deemed gift as provided in the G.T. Act, because in its opinion, the assessee was entitled to the relief on the ground that he had been taxed on this very amount in the proceedings under the G.T. Act for that year. In the opinion of the Tribunal, the department in respect of that transaction had treated it as a deemed gift. The assessee had paid the amount of gift-tax so determined. In the opinion of the Tribunal, therefore, it would not be proper, in the interest of justice, to allow the revenue to impose any capital gains tax on that transaction and, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y as follows : " 2. (xxiv) 'Transfer of property' means any disposition, conveyance, assignment, settlement, delivery, payment or other alienation of property and, without limiting the generality of the foregoing, includes-- (a) the creation of a trust in property ; (b) the grant or creation of any lease, mortgage, charge, easement, licence, power, partnership or interest in property ; (c) the exercise of a power of appointment of property vested in any person, not the owner of the property, to determine its disposition in favour of any person other than the donee of the power ; and (d) any transaction entered into by any person with intent thereby to diminish directly or indirectly the value of his own property and to increase the value of the property of any other person. " Section 4(1)(a) is to the following effect : " 4. Gifts to include certain transfers.-- (1) For the purposes of this Act,-- (a) where property is transferred otherwise than for adequate consideration, the amount by which the market value of the property at the date of the transfer exceeds the value of the consideration shall be deemed to be a gift made by the transferor. " Two questions, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly enacted it. This is well-settled. (See the observations in Stevens v. Durban-Roodepoort Gold Mining Co. Ltd. [1909] 5 TC 402 (KB) and see also the observations of the Supreme Court in the case of Jain Brothers v. Union of India [1970] 77 ITR 107 at page 112). The Constitution does not contain any prohibition against double taxation. But it is also well-settled that when there are general words of taxation and these have to be interpreted, then these should not be so interpreted if possible as to tax the subject twice over to the same tax. This proposition, however, will have to be applied with caution in case where the language used by the appropriate Legislature is clear on this point. If the Legislature has clearly expressed an intention to tax twice the subject to the same tax, then such impositions cannot be considered to be illegal. But in construing, in case of doubt, presumption would be to avoid taxing the subject twice over to the same tax. But where one transaction is made subject to different taxable events under different statutes, though cognate in nature, this concept of double taxation has no application. In the case of Reid's Trustees v. IRC [1929] 14 TC 512 at p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 47, in the old s. 12 of the Indian I.T. Act, 1922, and even before the G.T. Act, 1958, had come into effect. The first proviso to s. 12B of the Indian I.T. Act, 1922, excluded distribution, inter alia, of any capital asset " under a deed of gift " from the mischief of capital gains tax. Therefore, this is a factor which has to be borne in mind in considering whether the expression " gift " should be understood in the special meaning, that is to say, the meaning given under the G.T. Act, 1958, a factor which was taken into consideration by a Division Bench of the Andhra Pradesh High Court which we shall notice later. In the case of Shiv ShankarLal v. CIT [1974] 94 ITR 433, the Delhi High Court had occasion to consider this aspect of the matter. The Delhi High Court observed that the transaction in question to the extent of the amount which was sought to be assessed under s. 45 in that case had already been treated as a gift and was assessed under the G.T. Act. The same amount, therefore, according to the Delhi High Court, was exempt from assessment under s. 45 of the Act. In other words, it seems to us that the Delhi High Court proceeded on the view that the word " gift " in s.47(ii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing gift under the general law, this exclusion by that sub-clause would not become otiose. On the other hand, if the expression " gift " is confined to the gift contemplated by the G.T. Act then s. 52 of the I.T. Act, 1961, would really become surplus or otiose for the purpose of application of s. 45 in this case. Gift essentially is one parting with the property and another taking the same gratuitously. It is in that light gift is generally understood. In Mozley Whitley's Law Dictionary, 9th edn., page 149, " gift " is said to be as follows : " Gift.--A conveyance which passes either land or goods. As to things immovable when strictly taken, it was said to be applicable only to lands and tenements given in tail. This limitation of the word is, however, quite obsolete. Blackstone distinguishes a gift from a grant in that a gift is always gratuitous, without binding considerations, and therefore void in certain cases, whereas a grant is made upon some consideration or equivalent (Donatio Mortis Causa ; Grant) " Section 122 of the Transfer of Property Act, 1882, defines gift as under : Section 122 : " ' Gift ' is the transfer of certain existing movable or immovable prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which it is created. It is a well-known principle of construction in matters of statutory fiction that the fiction is limited only for the purpose for which it is created. See Bengal Immunity Co. Ltd. v. State of Bihar [1955] 2 SCR 603 at 646 ; [1955] 6 STC 446. Secondly, in the Indian I.T. Act, 1922, similar expression was used as we have noticed and Parliament has continued to use the same expression as it did in s. 12B in the I.T. Act, 1961. As we have noted that in taxing a transaction over again there would not be any question of double taxation. Furthermore, we have noted that the definition of transfer, as defined in s. 2(47) of the I.T. Act, 1961, is an indication that the transfer contemplated in s. 45 and onwards cannot be confined to transfers as contemplated by the G.T. Act, 1958. We are in respectful agreement with the learned Chief Justice of the Andhra Pradesh High Court in the views expressed on this aspect of the matter in the case of ITO v. Buragadda Satyanarayana [1977] 106 ITR 333 (AP). The other aspect of the matter adverted to in that case, namely, whether s. 52 was confined to a bona fide transaction or not, we are not called upon to decide in this case. We ..... X X X X Extracts X X X X X X X X Extracts X X X X
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