TMI Blog1981 (2) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... . 10 per share and not Rs. 4.80 per share as taken by the Income-tax Officer? The assessee was a limited company and the reference related to the assessment year 1972-73. The assessee-company was the owner of 1,22,400 shares of the face value of Rs. 10 each in M/s. Coles Cranes of India Ltd. which was acquired on 17th October, 1960, for Rs. 12,24,000 at the rate of Rs. 10 per share. On these shares, 1,32,600 bonus shares of the face value of Rs. 10 each, which ranked pari passu with the original shares, were issued on 24th March, 1970, free of cost. On 29th October, 1971, the assessee sold out the entire original 1,22,400 shares and 2,600 bonus shares for a total consideration of Rs. 17,35,000 (i.e., at Rs. 13.88 per share) to an Indian c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt came up in appeal before the Tribunal. It was submitted before the Tribunal on behalf of the department that since the bonus shares ranked pari passu with the original shares, the cost of bonus shares should have been worked out by spreading the cost of original shares over the original shares and the bonus shares collectively. On behalf of the assessee, however, it was contended that in case the bonus shares were obtained by detriment to the value of the original shares, the cost of acquisition of the bonus shares should be worked out by spreading the cost of the original shares to the cost of the original shares and the bonus shares. But the cost of acquisition of the original shares should not be determined as in the case of bonus s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we are concerned with, ss. 45, 48 and 55(2) of the I.T. Act, 1961, and Mr. Balai Pal, learned advocate for the revenue, drew our attention to those sections. These relevant sections read as follows : " 45. Any profits or gains arising from the transfer of a capital asset effected in the previous year shall, save as otherwise provided in sections 53, 54, 54B and 54D, be chargeable to income-tax under the head 'Capital gains', and shall be deemed to be the income of the previous year in which the transfer took place." " 48. The income chargeable under the head 'Capital gains' shall be computed by deducting from the full value of the consideration received or accruing as a result of the transfer of the capital asset the following amounts, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the provisions of s. 55(2) relating to the manner in which the cost of acquisition of a capital asset had to be determined for the purpose of s. 48 where the capital asset became the property of the assessee before the 1st day of January, 1954, the assessee had, the option to fix the cost of the acquisition of the asset to it as the cost of acquisition for the purpose of s. 48 or the, fair market value of the asset on the 1st January, 1954. Thus, having regard to the principle enunciated by the Supreme Court that while computing the capital gains the assessee was concerned with the cost of acquisition, that is, the price which was paid by the assessee for acquiring the capital asset on the date it was acquired subject to such adjustme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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