Equitable transfer of shares by delivery and executed deed prior to valuation date excludes gifted shares from net wealth.

Delivery of share certificates and execution of the deed of transfer before the valuation date constituted a complete transfer by creating equitable ownership in the donee, notwithstanding formal registration by the company later. Applying principles distinguishing equitable title from the company's recognition of legal title, the gift operated as transfer of movable property upon delivery and acceptance, and therefore the gifted shares were excluded from the assessee's net wealth for the relevant assessment year. The Tribunal's conclusion excluding the shares from net wealth is affirmed on that legal basis.

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Issues: Whether shares valued at Rs. 6,89,714 gifted before the valuation date should be excluded from the assessee's net wealth for assessment year 1958-59.

Analysis: The question turns on whether the gift of share certificates and execution of the deed of transfer before the valuation date effected a complete transfer between donor and donee despite formal registration occurring later. Relevant legal framework includes Section 27(1) of the Wealth-Tax Act, 1957, and principles developed in authorities concerning gifts of movable property and transfers of shares, which distinguish equities between transferor and transferee from the company's recognition of legal title. Applying those principles, delivery of the share certificates and execution of the transfer deed prior to the valuation date constituted the necessary acts of transfer and acceptance between donor and donee, creating equitable ownership in the donee even though the company's register was updated subsequently.

Conclusion: The shares gifted and delivered before the valuation date are excluded from the assessee's net wealth; the Tribunal's conclusion is affirmed and the question is answered in favour of the assessee.

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