Demerger share allotment treated as non-transfer, with proportionate cost and prior holding period carried forward. Transfer or issue of shares by the resulting company in a scheme of demerger to the shareholders of the demerged company is treated as a transaction not regarded as transfer when made in consideration of the demerger of the undertaking. The shares of the resulting company are assigned a proportionate cost of acquisition based on the shares in the demerged company, and the period of holding includes that of the previous owner. The same rule is reflected under the earlier and later income-tax provisions.