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Issues involved:
The judgment involves three main issues: 1. Computation of capital gains for a non-resident selling shares of an Indian company. 2. Determination of the cost of shares for deduction purposes. 3. Consideration of additional grounds raised by the appellant at the appellate stage. Issue 1 - Computation of Capital Gains: The case involved the sale of shares by a non-resident in an Indian company, with the main dispute being the method of computing capital gains. The non-resident contended that the gains should be first calculated in pounds and then converted to Indian rupees due to maintaining accounts in the U.K. However, the court held that since the transactions were in Indian rupees and the income arose in India, converting to foreign currency for computation was not necessary. The court cited a similar case where income expressed in Indian rupees did not require conversion, emphasizing that conversion is only relevant for foreign currency transactions. Issue 2 - Determination of Cost of Shares: The court examined whether the cost of shares for deduction should be based on the historical cost at acquisition or a subsequent point based on exchange rates. The Income-tax Officer calculated the capital gain based on the actual sale proceeds and deducted the cost of shares at acquisition. The court found that since both the purchase and sale prices were in Indian rupees, there was no need to convert to foreign currency for determining capital gains. The court ruled in favor of the Revenue on this issue. Issue 3 - Additional Grounds at Appellate Stage: Regarding the consideration of additional grounds raised by the appellant at the appellate stage, the court referred to a Supreme Court decision allowing the Appellate Assistant Commissioner to consider such grounds. The court ruled in favor of the assessee on this issue, stating that the Appellate Assistant Commissioner had the power to review additional grounds raised at the appellate stage. In conclusion, the court answered the first and second questions in favor of the Revenue and against the assessee, while ruling in favor of the assessee on the third question. The judgment clarified that for transactions expressed in Indian rupees, conversion to foreign currency for computation is not required, emphasizing the relevance of the currency in which the transactions are conducted for determining income.
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