‘Revocable transfer’ means the transferor of asset assumes a right to re-acquire asset or income from such an asset, either whole or in parts at any time in future, during the lifetime of transferee. It also includes a transfer which gives a right to re-assume power of the income from asset or asset during the lifetime of transferee.
S. 63 says that a transfer will be deemed to be revocable, if-
- there is any provision for re-transfer ever of the income or asset in anyway whatsoever to the transferor
- there is any provision through which transferor can reassume the power over whole/part of the income or asset.
For instance- Assessee just before receiving interest transferred debentures to his brother and immediately after receipt of the debenture interest by his brother reacquires them. In such a case the debenture interest will be clubbed in the hands of assessee. This is also the example of Bond washing transaction (S. 94(1)).
Reference:
As Per Section 63, of the Income Tax Act, 1961-
“Transfer” and “revocable transfer” defined.
For the purposes of S. 60, 61 and 62 and of this section,—
(a) a transfer shall be deemed to be revocable if—
(i) it contains any provision for the re-transfer directly or indirectly of the whole or any part of the income or assets to the transferor, or
(ii) it, in any way, gives the transferor a right to re-assume power directly or indirectly over the whole or any part of the income or assets ;
(b) “transfer” includes any settlement, trust, covenant, agreement or arrangement.