9911796707
TMI Blog2001 (1) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revenue, the following common question is referred to us in respect of the assessment year 1983-84: "Whether, the Appellate Tribunal is right in law and on facts in directing the Income-tax Officer to take the average price of bonus shares for computation of capital gains in, respect of sale of equity shares of Sarangpur Cotton Mfg. Co. Ltd. without reducing the cost of original shares on av ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s shares relying upon the principles laid down by the Supreme Court in CIT v. Dalmia Investment Co. Ltd. [1964] 52 ITR 567 and Shekhawati General Traders Ltd. v. ITO [1971] 82 ITR 788 and certain other decisions. The Income-tax Officer did not accept the above method of determining the value of the bonus shares and took the actual cost for the shares purchased, i.e., for the original shares and "n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed counsel for the Revenue, and Mr. R. K. Patel, learned counsel for the assessees, stated that the controversy raised in these references is now concluded by the decision of the apex court in Escorts Farms (Ramgarh) Ltd. v. CIT [1996] 222 ITR 509, wherein it has been held that where bonus shares are issued and some of the original shares are sold subsequently, their actual cost has to be reckoned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant statutory date because the shares were purchased prior to such statutory date. Mr. Patel for the assessees states that in all the present cases the original shares were purchased before the relevant statutory date and, therefore, the Tribunal was justified in following the principle laid down in Shekhawati General Traders Ltd.'s case [1971] 82 ITR 788. (SC). We, accordingly, hold tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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