TMI Blog1982 (3) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... ted shares valued at Rs. 6,89,714 to Shri Mahesh Kumar Jatia, grandson of the assessee. The gift was made on 10th November, 1956, and a trust deed was executed on 8th July, 1957. The transfer of the shares has been registered in the name of Mahesh Kumar Jatia in 1958 which falls after the valuation date. It is significant, therefore, to note that both 10th November, 1956, and 8th July, 1957, fall before the valuation date. In the register of members of the company the change of shareholding occurred after the valuation date in 1957. The relevant valuation date is 12th October, 1957. There is a mistake in the order of the Tribunal in the statement of the case in para . 3 but the correct date appears from the order of the Tribunal. The regist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Mahesh Kumar Jatia only in 1958, the assessee was the owner of the shares till then and the value of the shares should be included in the net wealth of the assessee. The Tribunal after referring to the share certificates and the facts of the case observed that the declaration of gifts in respect of these shares was made on 10th November, 1956, and the trust deed was executed on 8th July, 1957. Though the transfer of the shares was registered in 1958, the value of these shares could not be included in the wealth of the assessee. On these facts the question of law has been referred to this court. In our opinion, the ratio of the decision of the Madras High Court in the case of R. Subba Naidu v. CGT [1969] 73 ITR 794, would apply to the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asudev Ramchandra Shelat v. Pranlal Jayanand Thakar [1975] 45 Comp Cas 43, at p. 55, para 3; AIR 1974 SC 1728 at p. 1735, in para. 18, of the said judgment. The ratio of the same principle was followed in a different context by the Rajasthan High Court in the case of CIT v. Smt. Suraj Bai [1972] 84 ITR 774. Reliance was placed on a decision of the Supreme Court in the case of Howrah Trading Co. Ltd. v. CIT [1959] 36 ITR 215. The Supreme Court observed, at p. 218 of the report, as follows : "The position of a shareholder who gets dividend when his name stands in the register of members of the company causes no difficulty whatever. But transfers of shares are common, and they take place either by a fully executed document such as was co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can call upon the transferor to attend the meeting, vote according to his directions, sign documents in relation to the issuance of fresh capital, call for emergent meetings, and, inter alia, also compel the transferor to pay such dividend as he may have received. See E. D. Sassoon Co. Ltd. v. Patch [1943] 45 Bom LR 46 (Bom), approved in Mathelone v. Bombay Life Assurance Co. Ltd. [1954] 24 Comp Cas I (SC). But these rights, though they, no doubt, clothe the transferee with an equitable ownership, are not sufficient to make the transferee a full owner, since the legal interest vis-a-vis the company still outstands in the transferor; so much so, that the company credits the dividends only to the transferor and also calls upon him to make ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ratio of the said decisions, it appears to us that in this case, the Tribunal was right in holding, in view of the fact that both the delivery of the share certificates to the donee as well as the execution of the deed of transfer in favour of the donee were before the valuation date, the gift was complete and the value of the said shares could not be included, for the purpose of wealth-tax, in the value of the wealth of the assessee. In the case of Smt. Satyabati Goswami v. CGT [1978] 113 ITR 228 the Gauhati High Court had to deal with a similar question. But this aspect was not adverted to by the Gauhati High Court as to whether, in a case where, the share certificates were delivered and the transfer deed was executed before the parti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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