Gifted property is not a "transfer" under Chapter XX-A, so acquisition notice based on it lacked jurisdiction.

Chapter XX-A of the Income-tax Act was construed strictly because it authorises compulsory acquisition and affects proprietary rights. The court held that, for this chapter, the statutory definition of "transfer" in section 269A(h) is confined to sale or exchange; a gift does not fall within that expression. Since the acquisition proceedings and notice under section 269D(1) were founded on a gifted property, the statutory precondition for invoking Chapter XX-A was absent and the notice was without jurisdiction, warranting quashing in favour of the petitioner.

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Issues: Whether property acquired by gift falls within the expression "transfer" under Chapter XX-A of the Income-tax Act, 1961 so as to justify initiation of acquisition proceedings and issuance of notice under section 269D(1).

Analysis: The petitioner had acquired the property by gift, and that factual position was not disputed. Chapter XX-A, being a provision for compulsory acquisition that seriously affects proprietary rights, was held to require strict construction. The statutory definition in section 269A(h) confines "transfer" for the purposes of Chapter XX-A to transfer by way of sale or exchange. Modes of transfer recognised under other laws, including gift, do not fall within that definition. Since the impugned proceedings were founded on a gift transaction, the statutory condition for invoking Chapter XX-A was absent.

Conclusion: The notice initiating acquisition proceedings was without jurisdiction and liable to be quashed in favour of the petitioner.

Ratio Decidendi: For the purposes of Chapter XX-A of the Income-tax Act, 1961, "transfer" is restricted to sale or exchange, and a gifted property cannot be brought within that chapter for acquisition proceedings.

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