9911796707
TMI Blog1991 (1) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... riving income from, inter alia, share dealings during the previous year under consideration which was the calendar year 1980. The assessee claimed that it had suffered a loss in its share dealings. It had purchased 19,900 shares of M/s. Kesoram Cotton and Industries Ltd. at a cost of Rs. 8,32,230. During the previous year, it received 4,950 bonus shares from the same company against its original holding of 19,900 shares. The original 19,900 shares were sold during the previous year for Rs. 6,97,120. The assessee retained the bonus shares with it. The assessee had to calculate the difference between the cost and sale proceeds of 19,900 original shares which were sold. For this purpose, the assessee took the cost of 4,950 bonus shares at "nil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot the bonus shares. The Commissioner of Income-tax (Appeals) agreed with the contention of the assessee and directed the Income-tax Officer to accept the computation of loss as made by the assessee. The Departmental representative argued before the Tribunal that the decision in the case of Smt. Protima Roy [1982] 138 ITR 536 (Cal) is not applicable in the assessee's case as the facts of that case are different. He also referred to a decision in the case of Shekhawati General Traders Ltd. [1971] 82 ITR 788 (SC) and urged that the cost of the shares had to be worked out by spreading the cost of the original shares over the original shares as well as the bonus shares. The business profit or loss has to be arrived at on the basis of such ave ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erved to be upheld. After considering the contentions of both the parties, the Tribunal held that the cost of the shares has to be determined by spreading the original cost over the total shares inclusive of bonus shares. The Tribunal further held that the decision in the case of Gold Mohore Investment Co. Ltd. [1969] 74 ITR 62 (SC) Was applicable in the instant case. The Tribunal also held that the decision in the case of Smt. Protima Roy [1980] 138 ITR 536 (Cal) is not applicable to the facts of this case. As a result, the Tribunal restored the order of the Income-tax Officer. We have heard learned counsel appearing for the parties and we have gone through the facts and circumstances of the case. In our view, the question referred t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of all the shares. It was urged before the Supreme Court that there was an apparent conflict between the decision of the Supreme Court in the case of CIT v. Dalmia Investment Co. Ltd. [1964] 52 ITR 567 (SC) and the decision in the case of Emerald and Co. Ltd. v. CIT [1959] 36 ITR 257 (SC). The Supreme Court negatived that contention at page 66 of the report in the following words : "These cases would normally have been decided on the strength of the ruling of this court but a doubt arose because in an earlier decision in Emerald and Co. Ltd. v. CIT [1959] 36 ITR 257 (SC) this court seemed to have approved of another method. In that case the bonus shares were not sold. In applying different methods, the difference was only Rs. 18 and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there seems to be some error in stating that the method of the Tribunal in Emerald's case [1959] 36 ITR 257 (SC) was finally accepted. Perhaps the court intended saying that the method of the Income-tax Officer was preferable but by error put down the name of the Income-tax Appellate Tribunal. In any case that case did not decide the matter fully because, as the court itself observed, the difference in the two methods only resulted in Rs. 18 being either added to or deducted from the ultimate result.' The Supreme Court reiterated, in other words, the principle enunciated by the Supreme Court in its decision in the case of CIT v. Dalmia Investment Co. Ltd. [1964] 52 ITR 567. Learned advocate for the Revenue again stressed before us that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
