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Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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AI Drafter ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether the petitioners were entitled to exemption from stamp duty under the 1937 notification on the ground that, after allotment and communication of shares, they had become beneficial owners of at least 90 per cent of the issued share capital of the transferee company.
Analysis: The notification applied to transfers between companies limited by shares where the prescribed beneficial ownership condition was satisfied. A subscriber does not become a shareholder merely on application; shareholder status arises on allotment and communication of allotment, and the register of members and share certificates evidence that status. On the facts, the shares were allotted, the allotment was communicated, certificates were issued, and the petitioners were entered in the register of members. The contract did not contain a condition precedent that prevented ownership from vesting, and any unresolved reciprocal obligations did not prevent the shares already allotted from conferring ownership or beneficial ownership.
Conclusion: The petitioners satisfied the conditions of the notification and were entitled to the certificate of exemption from stamp duty.
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