1993 (7) TMI 246

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..... OF 1980 - - - Dated:- 5-7-1993 - G.T. NANAVATI AND Y.B. BHATT, JJ. M.J. Thakore for the Applicant. JUDGMENT Bhatt, J. - In the present reference under section 256(1) of the Income- tax Act, 1961, the following question is referred to us for our decision : "Whether, on the facts and in the circumstances of the case, the cost of acquisition of the 300 shares in Alembic Chemi .....

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..... 1-8-1972. 200 shares of Alembic Glass Industries were purchased by her - 50 shares on 14-4-1965, at Rs. 100 per share, and the remaining 150 shares on 26-2-1965, at the rate of Rs. 205 per share. According to the assessee, the cost of acquisition for the purpose of computation of capital gains should be worked out only on the basis of the actual cost incurred by the assessee, i.e., the price pa .....

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..... appeal before the Tribunal who reversed the order of the AAC and the ITO. 4. The Tribunal appears to have taken the view that the specific shares which were sold, in respect of which the capital gains were required to be computed, were shares purchased from the market and in respect of which the cost of acquisition was specifically indicated by the assessee. The principle of averaging out was .....

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..... TR 497. In the said decision, while discussing the decision of the Supreme Court in the case of CIT v. Dalmia Investment Co. Ltd. [1964] 52 ITR 567, this court observed that the question before the Supreme Court was not merely with regard to the cost of bonus shares. The Supreme Court had worked out the cost of original as well as bonus shares by spreading the cost of original shares over the .....

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..... cquisition would apply only where the shares which are the subject- matter of the sale have been followed by issuance of bonus shares, on the shares so purchased from the market. 8. Under the circumstances, the question referred to us is answered as under: In the facts and circumstances of the case, the cost of acquisition of shares in question should be computed on the basis of averaging ou .....

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