Share transfer validity: absence of register entry does not defeat an executed transfer between parties or the related capital loss claim.

Shares are treated as validly transferred between transferor and transferee once the transfer documents are executed and the share certificates are delivered, even if the entry has not yet been made in the company's register. Registration in the company's books is necessary for the transferee to enforce shareholder rights against the company, but its absence does not by itself defeat the transfer inter se the parties. On the stated facts, the transfer forms and certificates had been handed over and registration had been sought, so the transfer remained effective and the capital loss claim was allowable.

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Issues: Whether shares are to be treated as validly transferred between the transferor and transferee, and the corresponding capital loss allowable, even though the transfer has not yet been entered in the company's share registers.

Analysis: The governing principle is that once the transferor and transferee have completed the necessary formalities, including execution of transfer documents and delivery of share certificates, the transfer is complete inter se the parties. Registration in the company's books is required to enable the transferee to exercise shareholder rights against the company, but the absence of such registration does not by itself negate the transfer as between the parties. The facts showed that the transfer forms and share certificates had been handed over and registration had been sought, while the company had not refused recognition of the transfer.

Conclusion: The transfer of shares was valid as between the parties notwithstanding the absence of entry in the company's register, and the assessee was entitled to the capital loss claim.

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