https://www.taxtmi.com/caselaws?id=276082 A clause in the articles of association empowering directors to refuse registration of share transfers constitutes a real restraint on free transfer for the purposes of section 23A of the Indian Income-tax Act. Because legal title to shares does not pass until the transferee is registered, the existence of a refusal power means the shares are not freely transferable during the relevant period. The fact that the directors had not previously refused registration did not remove the restriction created by the articles. The shares were therefore not freely transferable, and section 23A applied in favour of the Revenue. en-us Tue, 06 Feb 1962 00:00:00 +0530 Sat, 27 Oct 2018 13:00:26 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=276082 A clause in the articles of association empowering directors to refuse registration of share transfers constitutes a real restraint on free transfer for the purposes of section 23A of the Indian Income-tax Act. Because legal title to shares does not pass until the transferee is registered, the existence of a refusal power means the shares are not freely transferable during the relevant period. The fact that the directors had not previously refused registration did not remove the restriction created by the articles. The shares were therefore not freely transferable, and section 23A applied in favour of the Revenue. Case-Laws Income Tax Tue, 06 Feb 1962 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=276082