Supreme Court of India
Khoday Distilleries Ltd. v. Commissioner of Income Tax and Anr.
INSC stands for INDIAN SUPREME COURT. A neutral citation scheme assigned by the Court itself, so a judgment can be cited without depending on a commercial law reporter. INSC is the neutral citation scheme assigned by the Supreme Court, so a judgment can be cited without depending on a commercial law reporter.
What the Court ordered
We hold that.the word "allotment" indicates creation of shares by appropriation out of the unappropriated share capital to a particular person .and that such creation did not amount to · E -transfer.
Judgment, page 12
From the headnote
Gift Tax Act, 1958: ss. 2(xii), 4(1) - Rights issue by Company - Not c subscribed by shareholders - Allotment to remaining shareholders-investment companies - Liability of Company to pay gift tax - Held: Such allotment was not transfer - There was no element of existing right - Thus, no 'gift' arose ..: in terms of s. 2(xii)- Deemed gift uls. 4(1)(a) also not attracted - In any event, liability to: pay gift tax would be on donor- shareholder who exercised the option to renounce and. not on the company - Despite decision of Appellate Authority, Department did not initiate gift tax proceedings
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