Allotment of shares is “creation” of shares and not “transfer” of shares

A finer distinction between creation of rights – An allotment of shares is a “creation” of shares and not a “transfer” of shares Khoday Distilleries vs. CIT (Supreme Court) Where the department held that on the Company allotting rights and bonus shares to its shareholders in a disproportionate manner, it had made a “gift”, HELD, rejecting the contention that: (i) An allotment of shares is a “creation” of shares and not a “transfer” of shares. There is a vital difference between the two. An “allotment” is the creation of shares by appropriation out of the unappropr...