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PETITIONER: COMMISSIONER OF INCOME-TAX, ANDHRA PRADESH

       Vs.

RESPONDENT: T.N. ARVINDA REDDY

DATE OF JUDGMENT05/10/1979

BENCH: KRISHNAIYER, V.R. BENCH: KRISHNAIYER, V.R. DESAI, D.A.

CITATION:  1980 AIR   96            1980 SCR  (1) 872  1979 SCC  (4) 421

ACT:      Income-tax  Act-1961  Section  54(1)-Scope  of-Words  & Phrases-Purchase-Meaning of.

HEADNOTE:      The respondent  sold his house at a price sufficient to attract capital  gins but he pre-empted the demand of tax by acquiring  the   common  house   from  his  brothers  for  a consideration of  Rs 30,000/-  each through separate release deeds. On  behalf of  the Petitioner,  it was contended that release deeds by sharers in favour of one of them amounts to purchase within  the meaning  of s.  54 (1)  of the Act. The High Court  having held  it is,  the Revenue  came by way of Special Leave.      Dismissing the Petition, ^      HELD: Each  release 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 for a  price. Had  this been taken from non-fraternal owners of shares  or from  one stranger  owner, plain spoken people would have  called it a purchase. The reason is supported by decision in Hobshaw Brothers Ltd. v. Mayer, [1956(3) AER 833 and 835] that purchase primarily means acquisition for money paid, not  adjusted. There  is  no  reason  to  divorce  the ordinary meaning  of the word ’purchase’ as buying for price or equivalent  of price  by payment  in kind  or  adjustment towards an old debt or for other monetary consideration from the legal  meaning of that word in s. 54(1) of the Act. [873 B-D]

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Special  Leave  Petition (Civil) No. 1557 of 1979.      From the  Judgment and  Order  dated  1-2-1978  of  the Andhra Pradesh High Court in Case Referred No. 114 of 1976.      Soli  J.   Sorabji,  Solicitor   General  and  Miss  A. Subhashini for the petitioner.      S.T. Desai,  K.  J.  John  and  A.  K.  Verma  for  the Respondent.

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    The order of the Court was delivered by      KRISHNA  IYER,   J.  -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. 873      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 capital gains tax, but he pre-empted  the demand  for tax  by acquiring  the common house from  his three brothers who executed three release ,, deeds 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, s. 54(1)  of the  Income  Tax  Act,  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 ownership of all became separate ownership of one  amount to  purchase of  house  property  within  the meaning of  s. 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 i Rs. 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 Habshaw Brothers Ltd. v. Mayer has circumspectly said :           There are  no doubt  to be  found authorities  and      statutes 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. 874      We find  no reason  to divorce  the ordinary meaning of the word  ’purchase’ as  buying for a price or equivalent of price by  payment ill kind or adjustment towards an old debt or for  other monetary  consideration from the legal meaning of that word in Sec. 54 (1). If you sell your house and make a profit,  pay Caesar  what is due to him. But if you buy or build another  subject to  the conditions  of Sec. 54(1) you are exempt.  The purpose  is plain;  the symmetry is simple,

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the language  is plain.  Why mutilate the meaning by lexical legalism. We  see no  stress in  the section  on  ’cash  and carry’. The  point pressed must, therefore, be negatived. We have declined  lo hear  Sri S.  T.  Desai’s  artillery  fire although he  was armed  cap a  pie with  Mitakshara lore and law. A point of suffocating scholarship sometimes arrives in court when one nostaligically remembers the escapist verse:           "Where ignorance is bliss,           "Tis folly to be wise." Amen !      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. N.K.A.    Petition dismissed. 875