TMI Blog2000 (12) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... ffect that the cost of acquisition of 3,900 shares sold by the assessee during the previous year be taken at Rs. 57,150 in all for the computation of capital gains?" A brief reference to the factual aspects would suffice. The assessee is a Hindu undivided family. During the assessment year 1975-76, corresponding to the accounting year ending on March 31, 1975, it sold 3,900 shares of Mohan Meakin Breweries Limited for a sum of Rs. 28,295. The Income-tax Officer (in short "the ITO") noticed that these shares were out of a lot which had been thrown into the common hotchpotch by its coparceners on November 28, 1970. According to the assessee, the cost of acquisition of these shares was to be the market value of the shares as on November 28 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d learned counsel for the Revenue, there is no appearance on behalf of the assessee in spite of service of notice. The Revenue's stand before the Tribunal was pressed into service. Section 49(1)(iv) reads as follows: "49. Cost with reference to certain modes of acquisition.--(1) Where the capital asset became the property of the assessee--... (iv) such assessee being a Hindu undivided family, by the mode referred to in sub-section (2) of section 64 at any time after the 31st day of December, 1969,,the cost of acquisition of the asset shall be deemed to be the cost for which the previous owner of the property acquired it, as increased by the cost of any improvement of the assets incurred or borne by the previous owner or the assessee, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-section was introduced with effect from April 1, 1971, by the Taxation Laws (Amendment) Act, 1970, and at the relevant point of time read as follows: "64. (2) Where, in the case of an individual being a member of a Hindu undivided family, any property having been the separate property of the individual has, at any time after the 31st day of December, 1969, been converted by the individual into property belonging to the family through the act of impressing such separate property with the character of property belonging to the family or throwing it into the common stock of the family or been transferred by the individual, directly or indirectly, to the family otherwise than for adequate consideration (the property so converted or transf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing representing the proceeds of sale thereof and where the property is converted into any other property by any method, such other property. Explanation 2.--For the purposes of this section, 'income' includes loss." Under section 49(1)(iv), the effect of blending has to be in cases where the act of blending took place after December 31, 1969. In the instant case the act of blending was done on November 28, 1970. In our view the cost of acquisition cannot be taken as "nil" as was held by the Income-tax Officer, and the market value as was held by the Tribunal with reference to its decision in M. L. Jain's case. In fact the said decision came up for consideration of this court in Addl. CIT v. Madan Lal Jain and Sons [1983] 140 ITR 200. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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