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TMI Blog1979 (4) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee-Hindu undivided family suffered a decree for a sum of Rs. 5,40,986-3-0 in favour of one Sri Chand Ratan Dhanda in execution of which decree, through an assignee, the judgment-debtors were arrested on April 6, 1932, by an order of the High Court dated April 3, 1932. One Pannalalji and his father stood as sureties to obtain release of the judgment-debtors. The sureties obtained mortgages in respect of five properties belonging to the judgment-debtors under five different documents. We are concerned in this case with two mortgages, one dated May 4, 1934, for Rs. 14,000 in respect of property situated in James Street, Secunderabad, and the other dated March 20, 1935, for Rs. 39,000 in respect of property in Prederghast Road, Secun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken place on the date of the mortgages in question as, according to him, the definition of "transfer " under s. 2(47), being an inclusive definition, is wide enough to take in the transaction of mortgage. Secondly, the interest paid or accrued on the principal sum of money borrowed on the two mortgages would also be included in the cost of the asset and, if so calculated, the sale price fetched in the year 1964 for these two items being less than the amount of the value of the capital assets, no capital gains tax could be levied on these transactions. This claim of the assessee is resisted by Sri P. Rama Rao, learned standing counsel for the income-tax department, contending, inter alia, that the definition of "transfer" under s. 2(47) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exchange or relinquishment of the asset or the extinguishment of any rights therein or the compulsory acquisition thereof under any law. " True, as Mr. Anjaneyulu points out, this definition of " transfer " is an inclusive one. But, however, the categories of transfer with regard to a capital asset are : (1) sale, (2) exchange, (3) relinquishment of the asset, (4) extinguishment of any rights in the asset, and (5) compulsory acquisition of an asset under any law. In all the five categories of transfer enumerated therein, it is pertinent to notice, there is absolutely no iota of interest left in the hands of the transferor after the transaction of transfer. The entire interest in the capital asset is sought to be transferred and in fact in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n was), speaking for the court, observed at page 192 thus : " Before section 12B can be attracted, title must pass to the company by any of the modes mentioned in section 12B, i.e., sale, exchange or transfer. It is true that the word 'transfer' is used in addition to the word 'sale' but even so, in the context, transfer must mean effective conveyance of the capital asset to the transferee. Delivery of possession of immovable property cannot by itself be treated as equivalent to conveyance of the immovable property." For the reasons stated above, we hold that there was no transfer of capital assets by creating mortgages in the years 1934 and 1935 in respect of the two properties and, therefore, the transfer of the assets had in fact tak ..... X X X X Extracts X X X X X X X X Extracts X X X X
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