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TMI Blog1982 (4) TMI 150X X X X Extracts X X X X X X X X Extracts X X X X ..... n the issue of new shares by the company and that there was no taxable gift. The GTO however observed that the assessee during the previous year had issued 900 shares at par value, that the value of the assets shown in the balance sheet was Rs. 2,97,762 that the total value of assets held by the assessee-company worked out to Rs. 12,87,434 the net wealth of the company worked out to Rs. 15,58,362 that that deducting from this the liabilities shown in the balance sheet of Rs. 12,87,434 the net wealth of the company worked out to Rs. 2,70,928 that when the worth of the company was divided by 1,000 i.e. the number of shares the value of each share came to Rs. 2,718 that the value of 900 shares worked out of Rs.2,43,900 and that the said shres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this case cash was received by the company and the shares offered to him. The CIT (Appeals) by a peculiar reasoning found in paragraph two his order rejected that assessee contention and held that it is clearly a transfer liable to gift tax. The CIT(Appeals) further enhanced the taxable gift of Rs. 90,000 taking the value of each share at Rs. 371 as against Rs. 271 adopted by the GTO. Against this order of the CIT(Appeals) the assessee has come on further appeal before us. 2. The Id Charatered Accountant Sri G.Satyanarayana stressed before us that the allotment of shares by a company would not involve a transfer attracting the provisions of gift tax. In this connection he referred us to the ruling of the Supreme Court in the case of CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e shares because we are of the considered opinion that there was no transfer at all involved in this case. It is an axiomatic proposition of law that a company is a juristic person quite distinct form the share holders. A share holders of the company cannot be said to have any interest in the property of the company though he has a right to participate in the profit of the company if and when the company though he has a right to participate in the profits Of the company if and when the company decided to divide them. As pointed out by the Supreme Court in the case of Bacha F.Guzdar vs. CIT AIR 1955 SC 74 referred in the book Guide to the companies Act by Sri R.Ramaiya 9th Editon 1980 at page 112-it is clear that a share holders does not bu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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