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TMI Blog1993 (4) TMI 218X X X X Extracts X X X X X X X X Extracts X X X X ..... accounts in U.K. on the sale of shares of Hindustan Ferodo Ltd., an Indian company, should be computed in terms of Indian rupees rejecting the case of the assessee that as it has no place of business in India and it maintains its accounts in U.K., the capital gains arising from the transaction should be first computed in pounds and then converted into Indian rupees for the purpose of taxation? 2. Whether, even assuming that the assessee was entitled to first compute the amount of capital gains in sterling currency and then convert it into Indian rupees, the assessee was entitled to the determination of the cost of the shares for the purpose of deduction which is not the historical cost at the time of acquisition of the concerned shares, b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see and against the revenue. 4. We are, thus, left with the first two questions only. The controversy raised in these two questions pertains to the computation of capital gain on sale of shares by a non-resident. The facts of the case are in a very narrow compass which, briefly stated, are as follows : This reference relates to the assessment year 1974-75, the corresponding previous year being the year ended on 31-3-1974. During this previous year, the assessee sold 1,50,000 shares in an Indian company, namely, Hindustan Ferodo Ltd. to Life Insurance Corpn. and Unit Trust of India. The sale price was Rs. 22 per share. This price was also approved by the Government of India. Question arose in regard to the computation of capital gain on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion with the sale and, thus, arrived at the figure of Rs. 17,96,000 as capital gain which, according to him, was chargeable to tax under the head "Capital gains". 5. The controversy regarding addition of any cost of improvement of the shares is not before us for determination because that question was not decided by the authorities below. By virtue of our answer to the third question in favour of the assessee, this may have to be examined in accordance with law by the Tribunal or the Appellate Assistant Commis-sioner. 6. The only question that falls for determination before us is whether the computation of capital gain made by the ITO is correct or not. Before we proceed to decide this question, it may be pertinent to mention that there i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icult to agree with the submission that the assessee is entitled to compute the capital gain in the manner he has sought to do. In our opinion, it will be curious way of determining the income accruing or arising in India in terms of Indian rupee. In fact, the place where the assessee resides and the currency in which the money is deposited in the bank for the purpose of purchase, etc., are in our opinion, not relevant factors for determining the income arising from transactions where the cost of acquisition and consideration for transfer, etc., are all expressed in Indian rupee. In this case, the transaction of transfer of shares took place in India. The acquisition of shares was made in India. The cost of acquisition was expressed in term ..... X X X X Extracts X X X X X X X X Extracts X X X X
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