T S SRINIVASAN Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE question of law referred at the instance of the assessee under Section 256(2) of the Income-tax Act, 1961, for the assessment year 1973-74 is whether, on the facts and circumstances of the case, the method adopted by the Tribunal for valuing the cost of the shares in the hands of the assessee for the purpose of arriving at the taxable capital gains is correct in law.

(2.) THE assessee was an investor in shares and he purchased the shares after January 1, 1954, and certain bonus shares were also issued in his favour. THE question that arises is regarding the computation of capital gains arising on the sale of both original shares as well as bonus shares. THE Tribunal held that no separate value should be allotted to the bonus scares as the entire block of shares has been sold and the whole cost of origina] shares including the bonus shares being" a known figure, it would be unnecessary to ascertain the individual cost of each share.