Report No. 61

Chapter 1E

Some General Observations as to Taxation on Sale

1E.1. General observations as to "sale".-

So far, we have dealt with specific transactions. A few general observations may now be made. A sale of goods requires an agreement to transfer title in goods for money, followed by the actual passing of such title as a result of the agreement. This broad concept, thus requires (i) an agreement to transfer title, (ii) in goods, (iii) for money, and (iv) passing of title as a result of the agreement. Most of the problems that have arisen as to the taxability of various transactions are due to the fact that one (or more) of the ingredients mentioned above are missing from the transaction. This will be clear if the ingredient and its antithesis are represented as in the following chart, which also mentions the situation where the antithesis exists.

Ingredient	Antithesis
(i) Agreement to transfer title	Title passing without agreement, or no transfer of title.
(ii) In goods	Title passing under agreement but not for goods.
(iii) for money	Illustrative situation-
	Works contracts (No agreement to transfer the very goods which come into existence).
	Title passing for value other than money Illustrative situations-
(iv) Passing of title as a agreement	(a) Hire-purchase.
	(b) Consignment transfer1

1. See chapter 2.