MANGALORE ELECTRIC SUPPLY CO. LTD. vs THE COMMISSIONER OF INCOME TAX, WEST BENGAL

The Supreme Court held that the term 'transfer' in Section 12B(1) of the Income Tax Act, 1922, encompasses both voluntary and involuntary transfers, rejecting the notion that it should be limited to voluntary acts. The Court clarified that the ejusdem generis principle does not apply here, as the words 'sale', 'exchange', and 'relinquishment' do not create a distinct category that would restrict the meaning of 'transfer'. Consequently, the compensation received by the appellant for the compulsory acquisition of its undertaking was deemed liable for capital gains tax, affirming the decisions of the lower authorities.