9911796707
TMI Blog1994 (5) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... ins tax. He ought to have applied the ratio of the Supreme Court decision in McDowell's case (154 ITR 148) and confirmed the addition. (3) Without prejudice to the above, the learned CIT (Appeals) ought to have enhanced the income under the head 'Capital gains' representing the difference between the cost price and the conversion price as he himself has considered the amendment to section 34 w.e.f. 1-4-1985 in the appellate order." Thus, the dispute is about the taxability and quantification of capital gains. 2. The assessee is an individual and the relevant previous year ended on 31-3-1985. The assessee had sold 485 equity shares of TISCO for a total sum of Rs. 1,59,615 out of 507 shares held by her at the beginning of the previous y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ------------------- 66,100 Less : Profit on sale of 485 TISCO shares 42,730 shown ------------------- Rs. 23,370 ------------------- Thus, he brought to tax additional sum of Rs. 23,370. 4. The CIT (Appeals) deleted the addition of Rs. 23,370 and held that profit of Rs. 42,730 only was taxable. 5. Before us, the learned Departmental Representative referred to the changes in law brought about from 1-4-1985 and submitted that the CIT (Appeals) went wrong in deleting the addition of Rs. 23,370 to the total income. The learned authorised representative for the assessee placed very heavy reliance on the Tribunal's S.M.C. Bombay Bench 'A' viz. Madhoprasad Shanti Devi Saraf (HUF) [IT Appeal No. 5487 (Bom.) of 1987, dated 15-1-19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce with section 45(2) in respect of 485 shares actually sold in the previous year relevant to this appeal, capital gains are to be computed and taxed in respect of the excess of conversion price over the cost price; meaning thereby, that gross capital gains on long term assets are to be computed in view of section 45(2) at Rs. 170, that is (241 - 71) per share for a total of 485 shares actually sold. Thereafter, in accordance with section 80T, read the Twelfth Schedule deductions are to be allowed first for a sum of Rs. 5,000 and then 45 per cent of the balance. The amount to be added to the total income on this basis would turnout to be more than Rs. 23,370 actually added by the ITO and the difference would be 45 per cent of Rs. 42,730. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter the above extracted portion when it says : "... In these circumstances, there is no justification for adopting the capital gain at Rs. 23,370....". Actually, the addition required was more than Rs. 23,370 by 45 per cent of Rs. 42,730. 10. We may also refer to and deal with the assessee's reliance on the Tribunal's order dated 15-1-1990 in ITA No. 5487/B/87. The decision rendered in that case does not help the assessee for the simple reason that though in the impugned assessment order, reference is made to the reasoning given in the assessment order of Sri Madhoprasad Shanti Devi Saraf (HUF) for assessment year 1984-85, but computation made in those two assessment years as materially different. In the case of Madhoprasad Shanti Devi S ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
