TMI Blog1983 (7) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... e been validly transferred to Messrs. Karumuthu Ramaswamy Finance (P.) Ltd., during the accounting year relevant for the assessment year 1977-78 and, hence, the assessee is entitled to loss on such transfer ? 2.Whether the Appellate Tribunal's further finding to the effect that share being movable property can be transferred as per the articles of the company and the transferee gets the right of ownership even if the transaction is not entered in the share registers of the company is sustainable in law ?" The facts leading to the filing of this reference petition may briefly be stated: The assessee is an individual having income from a partnership firm, share dividends, sitting fees, etc . He sold some shares during the year which he h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions were not sham, as found by the ITO, but yet he agreed with the ITO that in the absence of entries in the share registers of the respective companies indicating the sale of shares, the sales cannot be taken to be complete and that, therefore, the assessee is not entitled to the set off of the "capital loss". The assessee preferred an appeal before the Tribunal contending that as between the transferor and the transferee the transaction of sale of shares is complete and from the mere fact that the company has not recognised the transfer and made entries in the share registers, it cannot be said that the transfer is incomplete. The Tribunal, following the decision of the Supreme Court in Shelat v. Thakar [1975] 45 Comp. Cas. 43 , he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the transferee acquires no right, though as between the transferor and the transferee, there may be equities to be adjusted. But, in a later decision of the Supreme Court in Shelat v. Thakar [1975] 45 Comp. Cas. 43, the Supreme Court has clearly laid down that where, as between the transferor and the transferee, all formalities have been gone through, such as the execution of a document of transfer and the physical handing over of the shares by the transferor to the transferee, the shares should be taken to have been transferred to the transferee, though until the transfer of shares is registered in the company's books in accordance with the company law, the transfer could not enable the transferee to exercise rights of a shareholder ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w, that the gift of the right to get share certificates made out in the name of the donee became irrevocable and complete by registration of the deed as well as by delivery and nothing was left to be done so far as the vesting of such a right in the donee was concerned and that the actual transfers in the registers of the companies concerned, which were necessary to enable the donee to exercise the rights of a shareholder, were mere enforcement of that right, and the mere fact that such transfers had to be recorded in accordance with the company law did not detract from the completeness of what was donated. According to the said decision of the Supreme Court, if the transferor has transferred the right to get the share certificates from the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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