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1969 (4) TMI 27 - SC - Income TaxWhether the method adopted by the Income-tax Officer in relation to the Fort Gloster jute shares is the method approved of by this court, namely, that where the shares are pari passu and the valuation is to be made at cost, the price of the original shares must be spread over the old and the new shares and they must be held to have been purchased at the average cost and that the profit or loss is to be calculated accordingly? Held that:- This court held that the correct method to apply in cases where bonus shares rank pari passu is to follow the third method, namely, to take the cost of the original shares and to spread it over all the original as well as the bonus shares and to find out the average price of all the shares. The cases will be disposed of in the light of our observations by the Income-tax Appellate Tribunal by calculating the profit and loss by spreading the cost over the original and the bonus shares and finding out the average cost per share. The appeals are allowed.
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