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Transfer of Property

June 15, 2021


  1. Introduction
  2. Transfer of Property
  3. Transfer and Assign
  4. Transfer and relinquishment

Introduction:- To convey; to make over to another; the document by which property, as shares in public companies, is made over by one to another.  The term “transfer” includes not merely a sale or exchange, but also extinguishment of any right in the capital assets (vide capital gains), CIT v. S. Balasubramanian(1998) 3 SCC 596.  Transfer includes sale, purchase, mortgage, pledge, gift, loan or any other form of transfer of right, title, possession or lien, [Section 2(za), Prevention of Money-Laundering Act, 2002. Tansfer also ncludes letting on hire, lending, giving and parting with possession, Section 2(k), Arms Act, 1959 .

 In relation to a capital asset, includes, (i) the sale, exchange or relinquishment of the asset or (ii) the extinguishment of any rights therein or (iii) the compulsory acquisition thereof under any law or (iv) in a case where the asset is converted by the owner thereof into or is treated by him as, stock-in-trade of a business carried on by him, such conversion or treatment or (iv-a) the maturity or redemption of a zero coupon bond or (v) any transaction involving the allowing of the possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in Section 53-A of the Transfer of Property Act, 1882 (4 of 1882) or (vi) any transaction (whether by way of becoming a member of or acquiring shares in, a cooperative society, company or other association of persons or by way of any agreement or any arrangement or in any other manner whatsoever) which has the effect of transferring or enabling the enjoyment of, any immovable property, See. Section 2(47), Income Tax Act, 1961.

Transfer of Property:-

Transfer of proeprty includes a transfer of any interest in property and the creation of any charge upon property, [Section 2(f), Provincial Insolvency Act, 1920. 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 (whether general, special or subject to any restrictions as to the persons in whose favour the appointment may be made) 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, See. Section 2(xxiv), Gift-Tax Act, 1958 .

Transfer and assign — The word “assign” denotes “generally to transfer property especially personal estate or set over a right to another”. In their generic sense, the words “assign” or “transfer” include every kind of transfer of the property from one to another including testamentary disposition, State of W.B. v. Kailash Chandra Kapur(1997) 2 SCC 387.

Transfer and relinquishment — An exchange involves the transfer of property by one person to another and reciprocally the transfer of property by that other to the first person. There must be a mutual transfer of ownership of one thing for the ownership of another. A relinquishment takes place when the owner withdraws himself from the property and abandons his rights thereto. It presumes that the property continues to exist after the relinquishment, CIT v. Rasiklal Maneklal (HUF)(1989) 2 SCC 454, 457.

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