JUDGMENT judgment of court was delivered by L. Narasimha Reddy J.-This reference, at instance of assessee- applicant, raises certain questions of considerable importance. applicant owned Ac.7.31 cents of land at Visakhapatnam. It was acquired by Government, by invoking provisions of Land Acquisition Act (for short "the Act"). Land Acquisition Officer passed award dated September 25, 1970, determining market value at Rs. 2.87 per square yard. sum of Rs. 1,02,068 was paid on same day and possession was taken. At instance of applicant, reference under section 18 of Act was made to Subordinate Court, Visakhapatnam and it was taken up as O. P. No. 59 of 1971. trail court passed decree dated February 5, 1974, enhancing market value to Rs. 20 per square yard, which aggregated to Rs. 6,93,187. About two years thereafter, i.e., on April 26, 1976, applicant created trust for members of his family and for charity. He endowed sum of Rs. 1,000 initially and made provision for transfer of amount receivable under decree passed in O. P. No. 59 of 1971 and further appeal that may arise out of it. Government filed A. S. No. 56 of 1978 feeling aggrieved by enhancement of compensation by trial court. It is important to note that trust got itself impleaded in A. S. No. 56 of 1978. On basis of interim orders passed in appeal, sum of Rs. 4,00,000 was deposited by Government. appeal was ultimately allowed in part on December 23, 1982, by reducing market value to Rs. 10 per square yard. Between April 25, 1976, and April 25, 1977, applicant received Rs. 4,00,000 towards enhanced compensation and he is said to have passed on to trust, only on April 4, 1983. In return filed for assessment year 1983-84, applicant reflected amount of compensation but pleaded that he is not liable to pay tax since it has been passed on to trust. Assessing Officer did not accept contention. According to him, very disposition made under trust is untenable in law since it was in respect of amount, which was very much in hands of applicant during assessment year. However, accepting plea of applicant that it has passed on amount on April 4, 1983, to trust, Assessing Officer levied gift-tax under Gift-tax Act. Feeling aggrieved by two orders passed under Income-tax Act and Gift-tax Act, respectively, applicant carried matter to Commissioner (Appeals). appeals were rejected through common order dated March 6, 1992. Thereupon, applicant filed I. T. A. Nos. 956/ Hyd/92 and GTA. No.8/H/92 before Income-tax Appellate Tribunal, Hyderabad Bench. Through separate orders, dated May 26, 1998, Tribunal dismissed both appeals. applicant filed common reference application in both appeals before Tribunal with request to refer certain questions to this court covering both appeals. After hearing both parties and undertaking extensive discussion, Tribunal referred following question for answer to this court: "Whether, on facts and in circumstances of case, entire amount of award received by assessee, shown in his books of account as liability of trust does not amount to income of assessee liable to be taxed in his hands under Income-tax Act? Whether, on facts and in circumstances of case, assessee is not liable to pay gift-tax to assessment year 1984-85 relevant to financial year 1983-84 on amount of award finally received and accounted for in his books of account in name of trust'The P. Sreeramulu Naidu Trust' created under trust deed dated April 26, 1976, transferring right to receive compensation in favour of said trust?" While first one is referable to provisions of Income-tax Act, second one is referable to Gift-tax Act. Learned senior counsel for applicant submits that view taken by Assessing Officer, Commissioner and Tribunal that right to receive compensation could not have been gifted or made over in favour of trust is opposed to law. He contends that right to receive compensation is actionable claim and same is capable of being transferred. He further submits that Assessing Officer on one hand levied gift-tax by accepting gift of amount in favour of trust and on other hand, refused to acknowledge it in context of levying income-tax. He submits that both questions referred to this court deserve to be answered in favour of applicant. He places reliance upon judgments of Supreme Court in Mrs. Khorshed Shapoor Chenai v. Asst. CED [1980] 122 ITR 21 (SC), CWT v. Smt. Anjamli Khan [1991] 187 ITR 345 (SC), that of Bombay High Court in Akber A. Dehgamwalla v. CWT [1992] 195 ITR 17 (Bom) and that of Karnataka High Court in C. N. Nagakumar v. CWT [1992] 195 ITR 844 (Karn). Learned standing counsel for Department, on other hand, submits that it is only amount, which is definite and available at relevant point of time, that can be gifted and not something, which is uncertain. He submits that what was gifted by applicant to trust was not amount of compensation but only one which is subject matter of O. P. and further appeal and such parcels cannot be gifted at all. He submits that all authorities under Act have taken correct view of matter and both questions deserve to be answered against them. On merits also, learned counsel submits that though gift is said to have been made in year 1983, amount was received by 1977 and applicant enjoyed same till year 1983 and that same runs contrary to very facts pleaded by applicant. basic facts relating to case have been stated in brief in preceding paragraphs. land of applicant was acquired and he received compensation, that was awarded by Land Acquisition Officer in year 1970. He utilised amount for himself. After receiving compensation, he took steps for enhancement of same by seeking reference under section 18 of Act and, accordingly, O. P. No. 59 of 1971 was registered. In year 1972, trial court determined compensation payable at Rs. 6,93,187 in addition to what was paid by Land Acquisition Officer. applicant, however, did not receive amount till State filed A. S. No. 56 of 1978 and interim order was passed therein. It is during this interregnum, he created trust on April 26, 1976. relevant provision in trust deed reads as under: "1. In consideration of premises and of natural love and affection which settler bears towards his relations whose names have been specifically mentioned in schedule I... settler doth hereby create trust in respect of entirety of sum that may be finally receivable by settler after satisfaction of two decreed hereinabove referred and also transfers unto trustees sum of Rs. 1,000 (rupees one thousand only) in cash, as initially corpus fund to trust and right too entire compensation which is subject matter of A. S. No. 56 of 1976 on file of High Court or to any lesser sum that will be receivable on and after decision of High Court is rendered and for this purpose settler is so advised will have trust impleaded as party in appeal proceedings in High Court of Andhra Pradesh being assignee of right under this trust." Between date of trust deed and April 25, 1977, applicant received sum of Rs. 4,00,000 on basis of interim order passed by this court in A. S. No. 56 of 1978. However, he did not pass on amount to trust and retained it till April 4, 1983, though appeal itself was disposed of on December 23, 1982. applicant pleaded transaction of gift in favour of trust in relation to amount of compensation received in form of enhancement. Assessing Officer as well as Commissioner and Tribunal took view that gift of amount, which is not determined could not have been made at all. In this regard, focusing of attention to certain basic of law becomes necessary. Transfer of Property Act deals with "gifts" pertaining not only to immovable properties but also movable properties. Section 122 takes in its fold both categories of properties and it reads as under: "122.'Gift' defined.-'Gift' is transfer of certain existing movable and immovable property made voluntarily and without consideration, by one person, called donor, to another, called donee, and accepted by or on behalf of donee." Section 123 prescribes procedure to be followed for making gift of immovable property on one hand and immovable property on other hand. movable property takes in its fold not only tangible items but also intangible ones. Section 130 of Transfer of Property Act provides for transfer of actionable claims also. That expression is defined under section 3 of that enactment as under: "'Actionable claim' -'actionable claim' means claim to any debt, other than debt not secured by mortgage of immovable property or by hypothecation or pledge of movable property, or to beneficial interest in movable property not in possession, either actual or constructive of claimant, which civil courts recognise as affording grounds for relief, whether such debt or beneficial interest be existent, accruing, conditional or contingent." From perusal of this, it becomes clear that any amount representing debt other than one secured by mortgage or hypothecation need not be in actual or constructive possession of claimant. In ultimate analysis, it is right to claim amount. However, right must be clear and definite one. remote possibility of receiving amount such as one in suit for damages, cannot be treated as actionable claim. Unlike right to receive compensation under relevant enactments, Bombay High Court in Akber A. Dehgamwalla's case (supra) explained distinction as under (page 24 of 195 ITR): "It is only amount of compensation that is to be determined later on after taking into account various relevant aspects. In case of damages for breach of contract, there is no vested right as such. Breach of contract gives merely right to sue which right is certainly not "asset" within meaning of section 2(e) of Act." amount involved in this case is one referable to Act. In given case, if mere right to receive compensation that may be enhanced may tend to become one, equivalent to damages. reason is that one cannot take enhancement of compensation for granted. Several factors surround it and it is only on case being made out, that court can enhance compensation. Had applicant gifted mere right to receive probable enhanced compensation, things would have been different altogether. By time he created trust deed, compensation stood already enhanced in year 1974. What was gifted to trust was compensation enhanced in O. P. only difference was that amount so enhanced was subject to modification by High Court. Therefore, being actionable claim, it was capable of being gifted. judgment in Mrs. Khorshed Shapoor Chenai's case (supra) arose under Estate Duty Act. Supreme Court took view that compensation for land, which is acquired under Act cannot be treated as part of estate of assessee, and his right to receive compensation at market value as on date of notification that may accrue to him can certainly be treated as property, that would pass on, on his death. In other words, right to receive compensation was treated as item of property. Similar view was expressed in Smt. Anjamli Khan's cases (supra). Therefore, view taken by Assessing officer, Commissioner and Tribunal in instant case that right to receive enhanced compensation could not have been gifted, does not accord with law. We hold that arrangement made under gift deed was legal and valid and there is nothing unnatural about it. However, undisputed facts disable applicant from getting any relief. It has already been mentioned that enhanced compensation of about Rs. 4,00,000 was received by applicant between April 26, 1976, and April 25, 1977. Had he passed on that amount instantly to trust, amount would have become corpus of trust. Since amount remained in hands of applicant, at least till April 4, 1983, i.e., for period of 6 years, it partakes of character of income and was rightly assessed to tax. It was only in subsequent year, i.e., 1984-85, that he was levied gift-tax, accepting contention of transfer of amount on April 4, 1983. Therefore, we answer both questions against applicant and reject reference. *** Pentakota Radhakrishna v. Commissioner of Income-tax