TMI Blog1993 (4) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... omputed in terms of Indian rupees rejecting the case of the assessee that as it has no place of business in India and it maintains its accounts in the U. K., the capital gains arising from the transaction should be first computed in pounds and then converted into Indian rupees for the purpose of taxation? 2. Whether, even assuming that the assessee was entitled to first compute the amount of capital gains in sterling currency and then convert it into Indian rupees, the assessee was entitled to the determination of the cost of the shares for the purpose of deduction which is not the historical cost at the time of acquisition of the concerned shares, but the cost worked out at the subsequent point of time on the basis of the exchange rate o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e third question in the negative, that is, in favour of the assessee and against the Revenue. We are thus left with the first two questions only. The controversy raised in these two questions pertains to the computation of capital gains on the sale of shares by a non-resident. The facts of the case are in a very narrow compass which, briefly stated, are as follows : This reference relates to the assessment year 1974-75, the corresponding previous year being the year ended on March 31, 1974. During this previous year, the assessee sold 1,50,000 shares in an Indian company, namely, Hindustan Ferodo Ltd., to the Life Insurance Corporation and the Unit Trust of India. The, sale price was Rs. 22 per share. This price was also approved by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 10 per share which amounted to Rs. 15 lakhs. The Income-tax Officer also allowed deduction of a sum of Rs. 4,000 by way of bank charges in connection with the sale and thus arrived at the figure of Rs. 17,96,000 as capital gain which, according to him, was chargeable to tax under the head "Capital gain". The controversy regarding addition of any cost of improvement of the shares is not before us for determination because that question was not decided by the authorities below. By virtue of our answer to the third question in favour of the assessee, this may have to be examined in accordance with law by the Tribunal or the Appellate Assistant Commissioner. The only question that falls for determination before us is whether the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in in such a manner is that the assessee had paid for the purchase of these shares in pound sterling in U. K. We have considered the submissions of counsel for the assessee. We find it difficult to agree with the submission that the assessee is entitled to compute the capital gain in the manner it has sought to do. In our opinion, it will be a curious way of determining the income accruing or arising in India in terms of the Indian rupee. In fact, the place where the assessee resides or the currency in which the money is deposited in the bank for the purpose of purchase, etc., are, in our opinion, not relevant factors for determining the income arising from transactions where the cost of acquisition and consideration for transfer, etc., a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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