Transfer of title in specific shares failed where no delivery, identification, or transfer documents showed a completed sale

Under the Sale of Goods Act, property in specific goods passes only when the goods are ascertained and in a deliverable state, with transfer of title depending on the parties' intention. Here, the shares were never delivered, their serial numbers were not identified, no transfer forms or scrips were handed over, and they remained in the assessee's custody and closing stock. The books also did not show credit of the price in 1948, with the alleged settlement appearing only in 1952. On those facts, the 5-2-1948 documents did not effect a transfer of title or equitable ownership, and the amount was taxable as income.

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Issues: Whether the transaction dated 5-2-1948 amounted to a completed sale of specified shares so that the sum of Rs. 3,59,559 could not be brought to tax as income of the assessee company.

Analysis: Under the Sale of Goods Act, property in specific goods passes according to the intention of the parties, but only where the goods are ascertained and in a deliverable state. The shares in question were never delivered, their serial numbers were not identified, no transfer forms or scrips were handed over, and the shares remained in the assessee's custody and in its closing stock. The entries in the books also showed that the price was not credited in 1948 and that the alleged settlement was reflected only in 1952. These facts showed that the documents of 5-2-1948 did not effect a transfer of title or equitable ownership.

Conclusion: The transaction was not a completed sale on 5-2-1948, and the amount of Rs. 3,59,559 was rightly included in the assessee's taxable income.

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