Capital gains on mixed share blocks may be computed without separate cost attribution for each original and bonus share.

When original shares and bonus shares are sold together as one block, taxable capital gains do not require a separate cost to be attributed to each individual share if the cost of the original holding as a whole is known. Following its earlier decision on identical facts, the Madras HC upheld the Tribunal's computation method and accepted that the combined transfer could be valued without isolating an individual cost for every share. The issue was answered in the affirmative and against the assessee.

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Issues: Whether, for the purpose of computing taxable capital gains on sale of original shares together with bonus shares, it is necessary to ascertain and attribute a separate cost to each share.

Analysis: The shares in question formed one sold block comprising original shares and bonus shares. The Court followed its earlier decision on identical facts and held that when the entire lot of shares, including bonus shares, is transferred, there is no need to determine the individual cost of each share separately if the cost of the original holding as a whole is known. On that basis, the Tribunal's method of computation was upheld.

Conclusion: The question was answered in the affirmative and against the assessee.

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