Sale versus gift in property transfer: deed recitals and money consideration showed a sale, not a gratuitous transfer.

A transfer is a sale, not a gift, where the deed shows transfer of ownership for money consideration already deposited with the vendor and held as amanat. The recitals and surrounding circumstances indicated a bargain for sale, satisfying the definition of sale under the Transfer of Property Act, while a gift requires a transfer without monetary consideration and the deed disclosed no gratuitous intent. The contention that the consideration was not validly traceable under the Contract Act failed because it remained linked to the deceased father's instructions and the deposit with the vendor. The revenue's treatment of the deed as a sale deed was upheld.

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Issues: Whether the transaction dated 26 July 1956 was a sale or a gift for the purpose of computing capital gains.

Analysis: A sale under section 54 of the Transfer of Property Act, 1882 requires transfer of ownership in exchange for price, and price means money consideration. The document recited that the property was transferred for Rs. 26,000 already deposited with the vendor and held by him as amanat. The recitals showed that the property was sold in pursuance of that monetary consideration and not gratuitously. A gift must be without monetary consideration, and the deed contained nothing indicating an intention to make a gift. The court also held that an agreement to sell could be inferred from the recitals and surrounding circumstances, and the contention based on section 2(d) of the Contract Act, 1872 failed because the consideration was traceable to the deceased father's instructions and deposit with the vendor.

Conclusion: The transaction was a sale and not a gift, and the revenue's treatment of the deed as a sale deed was upheld.

Ratio Decidendi: Where a deed transfers ownership for a money consideration already deposited with the vendor and the recitals show a bargain for sale, the transaction is a sale and cannot be treated as a gift merely because the consideration was linked to prior instructions or arrangements.

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