Transfer Redefined- Ugly Definition
Section 2 (47) of the Income tax Act, 1961 has been a very tricky definition section dealing with the term ‘transfer’. As many as 6 on date clauses therein set the parameter to judge the effect of a capital account transaction. But the hidden list is endless as the term “Transfer” has been defined in inclusive manner so that Courts have always held a view that it is a word of the widest import and includes every act by which property may pass from one person to another. This therefore desired insertion of sections to either hold a transaction as not amounting to transfer ( section 49 of 1961 Act) specifically or to provide exemptions ( sections 54 onwards ) to avoid undue hardship upon the assessee. In other words one wrong (inclusive definition) has lead to serious complications. Exemptions are manipulated and fought over in several forums. Transfers are denied in several situations and so on.
Several amendments were made in such inclusive definition from time to time consequent to legal developments. Moreover with every amendment started another legal fight on to whether the effect of such amendment is clarificatory or substantive in nature. So there have been battles fought forward, backward and sideways.
In the new code there are as many as 16 clauses or instances of transfer situations in clause 287 of section 284 so that keeping such definition still in inclusive style is ruthless. Sixteen clauses in one go is clearly an exhaustive coverage so that anything beyond such number would be unreasonable. If we leave such definition as inclusive we will witness yet another round of long series of litigation and that would squarely go against the theme of the direct tax code. Experience has shown that the term ‘transfer’ has been a matter of big debate in Courts and