1994 (12) TMI 30

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... 256(1) of the Income-tax Act, 1961, made at the instance of the assessee, the Income-tax Appellate Tribunal, Bombay Bench 'E', Bombay, has referred the following question of law to us for opinion : " Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the gains arising out of the sale of bonus equity shares of the Standard Mills Co. Ltd. held .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ntended by the assessee before the Appellate Assistant Commissioner that the capital gains arising out of the sale of bonus shares should not have been included in the total income of the assessee. The Appellate Assistant Commissioner, however, rejected this contention and dismissed the appeal. The assessee filed further appeal before the Tribunal. It was contended by the assessee before the Tri .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... nd CIT v. Gold Mohore Investment Co. Ltd. [1969] 74 ITR 62 and of the Bombay High Court in CIT v. Alcock Ashdown and Co. Ltd. [1979] 119 ITR 164. Hence, this reference at the instance of the assessee. We have carefully considered the contention of the assessee and the order of the Tribunal. We have also perused the decision of the Supreme Court in CIT v. B. C. Srinivasa Setty [1981] 128 ITR 294 .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... is settled by the decision of this court in D. M. Dahanukar v. CIT [1973] 88 ITR 454 that the above method of valuation of bonus share would apply irrespective of the fact whether the assessee is a dealer in shares or an investor. The above legal position was reiterated by this court in W. H. Brady and Co. Ltd. v. CIT [1979] 119 ITR 359. In the above case, the assessee had treated the cost of ac .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... we are of the clear opinion that the Tribunal was right in law in holding that the gains arising out of the sale of bonus equity shares held by the assessee were liable to be included in the income of the assessee as capital gains for the purpose of income-tax. In the premises, we answer the question referred to us in the affirmative and in favour of the Revenue. In the facts and circumstance .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X