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Commissioner of Income Tax, Andhra Pradesh Vs. T.N. Aravinda Reddy - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtSupreme Court of India
Decided On
Case NumberSpecial Leave Petition (Civil) No. 1557 of 1979
Judge
Reported inAIR1980SC96; (1979)12CTR(SC)423; [1979]120ITR46(SC); (1979)4SCC721; [1980]1SCR872; 1980(12)LC83(SC)
ActsIncome Tax Act, 1961 - Sections 54;
AppellantCommissioner of Income Tax, Andhra Pradesh
RespondentT.N. Aravinda Reddy
Appellant Advocate Soli J. Sorabji,; Solicitor General and; A. Subhashini, Adv
Respondent Advocate S.T. Desai, ; K.J. John and ; A.K. Verma, Advs.
Cases ReferredHobshaw Brothers Ltd. v. Mayer
Prior historyFrom the Judgment and Order dated February 1, 1978 of the Andra Pradesh High Court in Case Referred No. 114 of 1976--
Excerpt:
- .....of the word, 'means' an agreement for the conveyance of property for a price in money; but the word 'sale' may be used in law in a wider sense and so applied to the conveyance of land for a price consisting wholly or partly of money's worth other than the conveyance of some other land.apparently he considered that-a sale for something other than money can in a wider sense be properly described as a sale.we agree. the signification of a word of plural semantic shades may, in a given text, depend on the pressure of the context or other indicia. absent such compelling mutation of sense, the speech of the lay is also the language of the law.3. we find no reason to divorce the ordinary meaning of the word 'purchase', as buying for a price or equivalent of price by payment in kind or.....
Judgment:

V.R. Krishna Iyer, J.

1. We regard the single point, persuasively presented by the learned Solicitor General on behalf of the petitioner (The Commissioner of Income Tax, Andhra Pradesh), as deserving of a speaking order, although in dissent, since the question may arise again and needs to be silenced.

2. Briefly, the facts. Four brothers, members of a coparcenery, partitioned their family properties, leaving in common a large house in the occupation of their mother. The eldest, who is respondent before us, sold his own house at a price sufficient to attract handsome capitil gains tax, but he pre-empted the demand for tax by acquiring the common house from his three brothers who executed three release for a consideration of Rs. 30,000/- each, adjusted towards the extra share (Jeshtabhaga) agreed to be given to the eldest by the next three. It is common ground that if these release deeds did amount to purchase of the house, Section 54(1) of the Income Tax Acticle, 1961, would save the respondent from exigibility to tax. So the short question, neatly identified by the learned Solicitor General is whether release deeds by sharers in favour of one of them whereby the joint onership of all became separate ownership of one amount to purchase of house property within the meaning of Section 54(1) of the Act. The High Court has held it is and we concur. Undoubtedly, each release, in these circumstances, is a transfer of the releaser's share for consideration to the release. In plain English, the transferee Purchases the share of each of his brothers. It is for a price of Is. 30,000/- each. Had this been taken from non-fraternal owners of shares or from one stranger-owner, plain-spoken people would have called it a purchase. Why, then, should legalist be allowed to play this linguistic distortion. The reason, supposedly supported by an English decision, is that purchase -primarily means acquisition for money paid, not adjusted. Upjohn, J. in Hobshaw Brothers Ltd. v. Mayer [1956] 3 A. E. R. 833 has circumspectly said:

There are no doubt to be found authorities and statute which have extended that meaning. In Mr. T. Cyprian Williams book, the Contract of Sale of Land, at p. 3 he says: ''sale', in the strict and primary sense of the word, 'means' an agreement for the conveyance of property for a price in money; but the word 'sale' may be used in law in a wider sense and so applied to the conveyance of land for a price consisting wholly or partly of money's worth other than the conveyance of some other land.

Apparently he considered that-a sale for something other than money can in a wider sense be properly described as a sale.

We agree. The signification of a word of plural semantic shades may, in a given text, depend on the pressure of the context or other indicia. Absent such compelling mutation of sense, the speech of the lay is also the language of the law.

3. We find no reason to divorce the ordinary meaning of the Word 'purchase', as buying for a price or equivalent of price by payment in kind or adjustment towards an old debt or for other monetary consideration from the fugal meaning of that word in Sec. 54(1). If you sell your house and make a profit, pay Caesar what is die to him. But if you buy or build another subject to the condition of Sec. 54(1) you are exempt. The purpose is plain; the symmetry, simple the language is plain. Why mutilate the meaning by lexitlegalism. We see no stress in the section on 'cash and carry point pressed must, therefore, be negatived. We have declined to hear Sri S. T. Desa's artillery fire although he was armed cap a lis with Mitakshara lore and law. A point of suffocating scholarship sometimes arrives in court when one nostalgically remembers tie escapist verse:

Where ignorance is bliss,

Ties folly to be wise.

Amen !

4. A passing reference to avoidance and evasion of tax was made at the bar, a dubious refinement of a dated legal culture sanctified though, by judicial dicta. The court is not the mint of virtue and one day in our Welfare State geared to Social Justice, this clever concept of 'avoidance' against 'evasion' may have to be exposed. Enough unto the day is the evil thereof.


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