TaxTMI 
TaxTMI 
TaxTMI 
1973 (5) TMI 19
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....Rs. 4,69,894 ? " There is a slight mistake in question No. 2. The figure should be 22,440 shares of Rohtas Industries Ltd. and not 32,440 as is inadvertently stated in the said question. In view of the decision of this court in the case of Commissioner of Wealth-tax v. Smt. Radha Debi M. Nopany and in the case of Commissioner of Wealth-tax v. Mohan Lai Nopany and the decision of the Supreme Court in the case of Kishanlal Haricharan v. Income-tax Officer, the question No. 1 referred to this court must be answered in the negative and in favour of the revenue. We need not, therefore, discuss the facts relating to this question. So far as the second and the third questions are concerned, it appears that the assessee had held 22,440 ordinary shares in the Rohtas Industries Ltd. The assessee had shown these shares as her property for the assessment years 1957-58, 1958-59 and 1959-60, under the Wealth-tax Act, 1957. The assessee contended for the assessment year being the assessment year 1961-62, for which the valuation date was 31st March, 1961, that these shares were lost in the early part of 1954 and a criminal case had been filed by the assessee later on. For this reason, the asses....
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....ppears, had asked the assessee to finance for the acquisition of these shares and the assessee had deposited a sum of Rs. 1,12,200. The assessee contended before the Wealth-tax Officer that unless and until her claim to be recorded in the company's register as a shareholder in respect of 5,100 original shares was upheld by a competent court the assessee could not be considered to be the owner of these shares. It was further contended that the right to receive the bonus and right shares was also dependent on the assessee's restitution of the ownership in respect of the original 5,100 shares and all that the wealth-tax authorities could do was to include in the assessment a sum of Rs. 1,63,200 advanced by the assessee to the receiver as mentioned hereinbefore. Upon these the Tribunal held that there was good deal of force in the assessee's contention and according to the Tribunal so long as the ownership was not ascribed to the assessee by the competent court it could not be said that 22,440 shares belonged to the assessee. Having regard to the facts and circumstances prevailing on the valuation date the Tribunal felt that in so far as shares of the Rohtas Industries Ltd. were concer....
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....ase. From the facts as it appears from the statement of the case it appears that the shares were on blank transfers, that is to say, that the assessee had not got herself registered as the registered holder of the shares. Secondly, in 1954 these shares had been lost. Thirdly, that in respect of acquisition of certain right shares the assessee had financed to the extent of Rs. 1,63,200. Fourthly, in the relevant assessment year a dispute was pending over those shares and the assessee had instituted a suit in a civil court claiming title and right to get back those shares and a receiver had been appointed over those shares. In these circumstances, it is necessary to determine whether it can be said that the shares in question belonged to the assessee. The position of a shareholder in respect of the blank transfer deed was considered by the Supreme Court in the case of Howrah Trading Co. Ltd. v. Commissioner of Income-tax. At page 219 of the report the Supreme Court observed as follows: "Section 2(16) of the Indian Companies Act, 1913, defines 'share' as 'share in the share capital of the company'. Section 5 deals with the mode of forming incorporated companies, and in the case of co....
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..... Bombay Life Assurance Co. Ltd. But these rights though they, no doubt, clothe the transferee with an equitable ownership, are not sufficient to make the transferee a full owner, since the legal interest vis-a-vis the company still outstands in the transferor ; so much so, that the company credit the dividends only to the transferor and also calls upon him to make payment of any unpaid capital, which may be needed. The cases in Black v. Homersham or Wimbush, In re : Richards v. Wimbush hardly advance the matter further than this. " It appears, therefore, from the decision of the Supreme Court that so far as the ownership and the legal title was concerned the assessee was not the legal owner of the shares. The assessee, however, had equitable right, an equitable right against the transferor to have his name entered in the company's register and to have the benefits accruing from these shares. Counsel for the assessee drew our attention to the decision of this court in the case of Smt. Sumitra Devi Jalan v. Satya Narayan Prahladka. Incidentally, it might be mentioned that this case is the decision in the case which was filed by the assessee in the High Court. It must be mentioned,....
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....d breach of such duty (b) negligence in the act itself ; and lastly (c) negligence must be a proximate cause. It was further held that under the Companies Act, 1913, sections 28 and 34, the buyer of shares with blank transfer deeds had a statutory duty to have the shares registered in his name in order to become the full owner thereof. The delivery of shares along with blank transfer deeds passed not the property of the shares but a title legal and equitable right which enabled the holder to vest himself with the shares without the risk of his right being repudiated by any other person deriving title from the registered owner. Such a buyer had a further duty to the transferee or the public at large, not to leave or allow the shares to remain with the blank transfer deeds duly executed by the registered holders with a person, thereby enabling him to deal with these and such a duty was broken by leaving the property in such condition. In that case the learned judge found that there had been a breach of both those duties. It was further noted that the principle of law on which sections 27 to 30 of the Sale of Goods Act was founded was that one of the two innocent parties must suffe....