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TMI Blog1997 (1) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... into account the bonus shares received subsequently ? 2. Whether the Appellate Tribunal was right in holding that the provision for gratuity should be treated as a liability and should be deducted from the value of the assets for finding out the break up value of the shares ? 3. Whether the Appellate Tribunal was right in holding that the provisions of section 52(2) could not be invoked in the assessee's case ?" In so far as question No. 2 is concerned, the point for consideration is whether the provision for gratuity should be treated as a liability and should be deducted from the value of the assets for finding out the break-up value of the shares. A similar question came up for consideration before this court in CWT v. S. Ram [198 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tly declared or disclosed by him. In the present case, on the facts, the Tribunal came to the conclusion that there is no understatement or concealment. Therefore, the Tribunal held that the provisions of section 52(2) of the Income-tax Act, 1961, would not be applicable to the facts of this case. Inasmuch as the order passed by the Tribunal on this point is in accordance with the above cited decision of the Supreme Court, we answer the question referred to us as question No. 3 in the affirmative and against the Department. In so far as question No. 1 is concerned, the point for consideration is whether the Tribunal was correct in holding that the value of the shares as on January 1, 1954, should not be taken by averaging the cost taking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing more than 60 months up to the date of sale (see section 2(42A)). The cost of acquisition of those T. V. S. Limited shares will be the cost of acquisition of the Madras Auto Service P. Ltd. shares (see section 55(2) read with section 47(vii)). Since the original Madras Auto Service P. Ltd. shares were admittedly acquired before January 1, 1954, their value as on January 1, 1954, has to be adopted at the assessee's option. With regard to the original shares, there is no warrant for averaging the cost taking into account the bonus shares subsequently received by the assessee having regard to the decision of the Supreme Court in Shekhawati General Traders Ltd. v. ITO [1971] 82 ITR 788. Therefore, the Tribunal held that the original shares i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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