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TMI BlogGuidelines for approved intermediariesX X X X Extracts X X X X X X X X Extracts X X X X ..... he Board shall have the right to suspend/cancel the registration of the approved intermediary in case of violation of the terms of the scheme. (d) Notwithstanding anything contained above, no action shall be initiated by the Board without following the principles of natural justice. Circular No. 751, dated 10-2-1997 1. In order to improve the liquidity in the stock market, facilitate the timely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e approved intermediary for the purpose of borrowing of securities and as such there would be no direct agreement between the lender and the borrower. The approved intermediary shall be entitled to lend the securities deposited by the lender to the borrower from time to time. The title (ownership) of the securities shall rest with the borrower who will be entitled to deal with or dispose of the se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e securities lending scheme will amount to "transfer" under section 2(47) of the Income-tax Act in the hands of the lender ?' 4. As far as the stock market is concerned, shares are fungible assets. "Fungible" has been defined in the Shorter Oxford English Dictionary on Historical Principles as "said of thing which is the subject of an obligation when another thing of the same or another class may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. He will be in a ready position to either sell the shares and realise their value or send them to the company for transfer to his name. The transaction of lending shares of some distinctive numbers and receiving back shares of some other numbers is not "exchange" of assets within the meaning of "transfer" as defined in section 2(47) of the Income-tax Act. The meaning of the word "exchange" neces ..... X X X X Extracts X X X X X X X X Extracts X X X X
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