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TMI Blog1955 (9) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... w of our decision in Income-tax Reference No. 16 of 1948 (Commissioner of Income-tax v. M/s. Manecklal Chunilal & Sons Ltd.) the contention which has been raised by the assessee on this reference cannot be accepted. It appears that the assessee purchased 50 shares of the Bombay Dyeing and Manufacturing Co. Ltd., on the 11th November, 1950, for ₹ 49,101 and on the 9th January, 1951, the Bomb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shares at ₹ 250 which was the face value of the shares. On the other hand, the Department arrived at a loss of ₹ 27,766 and this loss was arrived at by resorting to the method of averaging the price of the shares. This is the method which we have laid down in the decision just referred to, and the method is a very simple one. At the beginning of the assessment year the assessee compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns that the bonus shares were received free and the assessee company paid nothing for the bonus shares. Therefore the contention of the assessee company that it should be allowed to put a price of ₹ 250 on these bonus shares is obviously untenable. The Tribunal has suggested a third method which in our opinion is equally, with respect, erroneous, and the method it has suggested is that the 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res, and that cost can only be arrived at by averaging the cost by taking into consideration the fact that the 50 bonus shares were received free of cost. It is only by that method that the proper profit or loss can be arrived at. In is only by that therefore, by reason of the decision that we gave in Commissioner of Income-tax v. Messrs. Manecklal Chunilal & Sons Ltd. (Income Tax Reference No. 16 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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