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1966 (10) TMI 52 - SC - Income TaxWhether, having regard to the provisions of section 12B(ii), the assessee is entitled to claim a deduction from the full value of the consideration of ₹ 45,262-50P. received for the capital asset, the sum of ₹ 37,630 or any similar sum ? Held that:- In working out capital gain or loss, the principles that have to be applied are those which are a part of the commercial practice or which an ordinary man of business will resort to when making computation for his business purposes. The principles of accounting indicated by us above are clearly the principle that must be applied in order to find out the net capital gain or loss arising out of a transaction of the nature with which we are concerned. The application of those principles indicates that the claim of the appellant that the net capital gain by her is not re resented by the whole amount of ₹ 45,262.50P. realised by her on renouncement of her right to receive the new shares was correct and that the net capital gain can only be properly computed after deducting the sum of ₹ 37,630 which approxim ately represents the loss incurred simultaneously by the appellant in her original asset of 710 old shares as a result of the depreciation in their value. The question referred to the High Court must, therefore, be answered in favour of the appellant. The appeal is, consequently, allowed, the answer returned by the High Court is set aside, and the question is answered in the affirmative. Appeal allowed.
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