Construction of sale deed controlled taxability: only immovable property conveyed, while separately identified fixtures did not pass under the deed.

A sale deed must be construed according to its own terms, and where the documents show separate arrangements for immovable property and movables with separate prices, only the property actually conveyed passes under the deed. Here, the deed conveyed only the immovable properties in part 1 of the schedule; the fixtures and movables described in part 2 were intended to pass separately by delivery and did not form part of the transfer. Capital gains tax under section 12B was therefore confined to the immovable properties transferred under the deed.

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Issues: Whether the sale deed dated 17 May 1946 conveyed only the immovable properties in part 1 of the schedule or also included the fixtures described in part 2, and consequently whether capital gains tax was chargeable under section 12B only on the immovable properties conveyed by the deed.

Analysis: The transaction had to be determined from the language of the agreement to sell and the sale deed. The documents disclosed two distinct arrangements, one for immovable properties and another for movables, with separate prices fixed for each. The sale deed actually conveyed only the properties described in part 1, and the consideration mentioned in it corresponded only to that part. The parties had also recognized that the movables would pass by delivery. Although fixtures attached to land may ordinarily pass with a transfer of immovable property, that result yields to a different intention expressly or by necessary implication appearing from the document. On a proper construction, the deed did not include any items in part 2.

Conclusion: The fixtures in part 2 did not pass under the sale deed, and capital gains tax was rightly confined to the transfer of the immovable properties in part 1.

Final Conclusion: The appeal failed because the taxable transfer under section 12B extended only to the immovable properties actually conveyed by the sale deed, and not to the movables or fixtures described separately in the agreement.

Ratio Decidendi: A transfer deed must be construed according to its own terms, and where the document discloses a distinct intention to sell movables separately and conveys only specified immovable property, capital gains tax applies only to the property actually transferred under the deed.

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