TMI Blog1981 (11) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... 63-64, the relevant accounting year being the financial year 1962-63, the assessee, which is an HUF, filed a return of income showing a total income of Rs. 29,720 comprising of capital gains of Rs. 21,000 and interest income of Rs. 8,720. It was mentioned in the return that the assessee became the owner of 40 shares in Roadways and General Finance Private Ltd. on April 4, 1961, which were sold by the assessee on April 18, 1962. According to the assessee the acquisition of the shares was for Rs. 40,000, the sale price was Rs. 61,000 and, therefore, the difference between the two, namely, Rs. 21,000 was the capital gain within the meaning of s. 45 of the I.T. Act, 1961. The aforesaid 40 shares had become the property of the assessee not by pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ains. The Commissioner, not being satisfied, made a motion for making a reference to this court of a question of law as to whether s. 48 was at all attracted in the circumstances of the case. This motion of law having been accepted, the Tribunal has made the above reference. Learned counsel for the Revenue submits that the cost of acquisition has to be the cost actually incurred by the assessee. In the present case, the assessee incurred no cost in acquiring the 40 shares. Therefore, the cost of acquisition would be " nil ". This cost of " nil " has to be deducted from the sale price. The profit or gain, therefore, was rightly computed at Rs. 61,000 by the ITO. In our view, the contention is not sound. The taxing section in the Act is s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 28 ITR 294 (SC). The Supreme Court was really concerned with deciding capital gain for an asset known as " goodwill ". All the same, what his lordship observed was that in s. 48 cost of acquisition of capital asset means, to quote (p. 300) " What is contemplated is an asset in the acquisition of which it is possible to envisage a cost. The intent goes to the nature and character of the asset, that it is an asset which possesses the inherent quality of being available on the expenditure of money to a person seeking to acquire it. It is immaterial that although the asset belongs to such a class, it may, on the facts Of a certain case, be acquired without the payment of money. " Earlier, in the same judgment it was observed (p. 299). " transac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay refer to s. 43 of the Act where, inter alia, the term actual cost " has been defined. This provision reads as under : 43. In sections 28 to 41 and in this section, unless the context otherwise requires (1) ' actual cost ' means the actual cost of the assets to the assessee, reduced by that portion of the cost thereof, if any, as has been met directly or indirectly by any other person or authority ...... .." It is settled law that in taxing provisions a strict view has to be taken, and words cannot be added or subtracted unless one is compelled in the context to do so. Here, we are not compelled to do so. We, therefore, answer this reference in the affirmative and in favour of the assessee. No costs. - - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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