TMI Blog2006 (3) TMI 197X X X X Extracts X X X X X X X X Extracts X X X X ..... rrants of Reliance Petroleum Ltd., which he acquired by virtue of his holding of Bonds. As per the scheme for the issue of bonds, each of the bond-holder was entitled to two warrants. These warrants entail the assessee to subscribe for the shares of Reliance Petroleum Ltd. Accordingly, the assessee was entitled for 1,82,200 such warrants. Out of these, the assessee acquired 50,000 warrants by purchasing 25,000 Bonds-cum-Rights from market at the rate of Rs. 31.50 each. The assessee sold all the warrants during the year for Rs. 2,64,504. For the purpose of working capital gain from the lot of 50,000, he adopted cost of acquisition on notional basis at Rs. 10.17 each, spreading over the purchase of the bonds at the rate of Rs. 31 each and con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and cost of acquisition should be worked out as per amendments by Finance Act, 1995, according to which the cost of additional benefits would be at nil The Assessing Officer accordingly, re-computed the short-term capital gain at Rs, 2,64,504. 4. The assessee preferred an appeal before the CIT(A) with the submissions that the value of the detachable warrants should be worked out in the light of judgment of the Apex Court in the cases of Dalmia Investment Co. Ltd. and Miss Dhun Dadabhoy Kapadia, but the Assessing Officer did not follow the same. The CIT(A) re-examined the issue in the light of amended provisions and confirmed the order of the Assessing Officer. 5. Now the assessee has preferred an appeal before the Tribunal and reitera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... original receipt, additional receipt, right to renounce etc. would be as follows: (i) in relation to original financial asset, cost of acquisition would be the amount actually paid for acquiring the said asset; (ii) in relation to any right to renounce the said entitlement to subscribe to the financial asset, when such right is renounced by the assessee in favour of any person, the cost of acquisition shall be taken at nil; (iii) in relation to the additional financial asset acquired on the basis of said entitlement, the cost of acquisition would be the actual amount paid by him for acquiring such asset; (iv) in relation to any financial asset purchased by any person in whose favour right to subscribe to such asset has been renounced, the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as "B" is concerned, cost of acquisition in relation to 10 shares acquired by him in the above process would be Rs. 19 per share, i.e., aggregate of Rs. 7 and Rs. 12 [vide sub-clause (iv)]. 9. Keeping in view the aforesaid legal position after the amendment, we have examined the facts of the instant case and we find that the assessee has acquired the TOCD of Reliance Petroleum Ltd. by virtue of original holding of shares. As such, in view of the amended provisions, the original cost of shares cannot be spread over for working the capital gain of sales. We, therefore, find no infirmity in the computation of short-term capital gain done by the Assessing Officer. Accordingly, the order of the CIT(A) is confirmed. 10. In the result, the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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