TMI Blog1985 (9) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... shares of M/s. Bajaj Auto Limited is an admissible deduction under section 37 or any other section of the Income-tax Act, 1961 ?" The assessee derives income from the manufacture of auto spare parts, from managing agency commission and from dividends. The assessee acquired 3,643 shares of M/s. Bajaj Auto Limited in or about February, 1968. The board of directors of M/s. Bajaj Auto Limited (now referred to as " M/s. Bajaj ", refused to register the said shares in the name of the assessee. The assessee took proceedings before the Company Law Board under section 111 of the Companies Act, 1956, to compel M/s. Bajaj to register the transfer of the said shares. The matter ultimately went up to the Supreme Court. The Supreme Court held that the di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Madras High Court in CIT v. M. Ramaswamy [1985] 151 ITR 122. Placing reliance upon the decision of the Supreme Court in Vasudev Ramchandra Shelat v. Pranlal Jaynand Thakar [1975] 45 Comp Cas 43, the Madras High Court held that if a transferor had transferred the right to get share certificates from the company to the name of the transferee, then, as between the transferor and transferee, the transfer was complete, though the transferee could not exercise his rights as a shareholder vis-a-vis the company, until the transfer of shares was recorded in the register of shareholders. This took away the force of the contention on behalf of the Revenue that till the shares were actually registered by the company in the name of the transferee, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee acquired pursuant to the handing over to it of the transfer deeds and the certificates of the said shares was the equitable right to compel the transferors to hand over to it the amounts of the dividends upon the said shares and to exercise the right to vote thereof in the manner dictated by the assessee. To perfect its legal title to the said shares, pursuant to which alone it would directly receive dividends and be enabled to exercise the right to vote, the name of the assessee had to be entered in the share register of M/s. Bajaj in respect of the said shares. To compel M/s. Bajaj to do so, the assessee took action before the Company Law Board and incurred the said expenses. The said expenses were, therefore, incurred in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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