K.C. Agrawal, J. - (1.) AT the instance of the assessee the Income-tax Appellate Tribunal has referred the following question of law for the opinion of this court : "Whether, on the facts and circumstances of the case, the transaction dated 26th July, 1956, was in law a sale or a gift ?"
(2.) THE relevant facts are these : One Shiraj Hasan was an advocate, who used to practice, at Lucknow. He died in 1950. During his lifetime he accumulated a huge wealth. He deposited Rs. 26,000 free of interest with one Zamir Ahmad out of his savings from his professional income for purchasing a house at Bareilly. THE instructions left by the deceased were that the house would be pur- chased in the name of Hasan Mumtaz, the assessee, who was minor at the time of the deposit of the money by the deceased, Shiraj Hasan, with Zamir Ahmad. After the death of Shiraj Hasan, Zamir Ahmad sold his own bungalow No. 204, Civil Lines, Bareilly, for a consideration of Rs. 26,000 which was lying in deposit with him in favour of the assessee. On March 1, 1967, the assessee sold the aforesaid bungalow for a sum of Rs. 1,00,000. In the assessment year 1967-68, the ITO did not accept the transaction as sale. , According to him the sale price was much more than what was mentioned in the sale deed and the transaction as disclosed was collusive. After obtaining the valuer's report he held that the fair market value of the property was Rs. 4,50,000. In appeal, the AAC reduced the valuation to Rs. 2,59,000. THE assessee went in appeal before the Tribunal, which was dismissed. However, on an application under Section 256(2) of the Act, the Tribunal was called upon to refer the question of law indicated above for the opinion of this court. The argument raised before the Tribunal as well as before us was that the deed dated July 26, 1956, executed by Zamir Ahmad was really a gift and that the income-tax authorities committed an error in treating it as a sale. The case of the assessee was that as it was a gift deed, the valuation of the property had to be computed in accordance with Section 49(1)(ii) of the Act. The case of the revenue, however, was that the document dated July 26, 1956, was a sale deed and the capital gain earned by the assessee had to be computed in accordance with Section 48(ii) of the Act. The two rival stands taken by the assessee and the department raise a controversy whether the transaction in question was a sale or a gift. The word "sale" has been defined in Section 54 of the Transfer of Property Act as follows: " 'Sale' is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised."
(3.) THERE is no definition of the word "price" in this Act. It is, however, settled that the word "price" is used in the same sense as in Section 4 of the Sale of Goods Act (See CIT v. Motors and General Stores (P.) Ltd. [1967] 66 ITR 692 (SC) (at page 695). Section 2(10) of the Sale of Goods Act defines "price" as meaning the money consideration for a sale of goods. The presence of money" consideration is, therefore, an essential element in a transaction of sale. Construing the document dated July 26, 1956, we find that the same fulfils all the requirements of being a sale. By this document ownership of the property was transferred by Zamir Ahmad in favour of the assessee for a consideration of Rsr 26,000, At places more than one, the deed clearly recites that the property had been sold in lieu of the consideration of Rs. 26,000 which had been deposited with the vendor by the said Shiraj Hasan and was lying with him as "amanat". There is nothing in this document which could be construed as meaning that a gift was intended to be executed. It may be correct that a document purporting to be a sale may be shown to be in reality a gift but the test is whether there was any consideration for the transaction. In the instant case the Tribunal found that the property was sold for consideration. If there is consideration, the transaction cannot be considered to be a gift inasmuch as it is necessary that a gift must be without monetary consideration. It is a settled rule of construction that the plain and ordinary meaning is to be adopted in construing a document. After applying the aforesaid rule of construction to the facts of the present case we feel no hesitation in agreeing with the view of the Tribunal that the deed could by no stretch of imagination be considered as a gift and was rightly interpreted as a sale.;