Appeals allowed, ITO directed to include disputed sum in share valuation as of 1-1-1954.

The appeals were allowed, and the Tribunal directed the ITO to include the disputed sum in the valuation of shares as on 1-1-1954, maintaining the original assessment findings and adhering to the directions of the appellate authorities.

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Issues:
Computation of capital gains on the sale of shares and the correct valuation method for partly paid shares as on 1-1-1954.

Analysis:
The legal heirs of late Shri T.S. Srinivasa Iyer filed appeals questioning the correct computation of capital gains on the sale of shares and the valuation method for partly paid shares as on 1-1-1954. The assessee sold 1,250 shares to his grandchildren, comprising fully paid-up shares and partly paid shares. The dispute arose regarding the valuation of these shares, with the ITO initially revaluing them by including subsequent call money paid on partly paid shares. The AAC and the Tribunal confirmed the ITO's computation. However, the Tribunal later directed the ITO to revalue the shares by dividing the aggregate of paid-up capital and reserves by the total number of shares, resulting in a different valuation method.

The legal representatives argued that the subsequent payment on shares was included in the original assessment and should not have been ignored while giving effect to the Tribunal's order. They relied on a decision of the Calcutta High Court to support their contention. On the other hand, the departmental representative argued that subsequent payments should not be considered for the valuation of shares as on 1-1-1954, as per previous decisions of the Calcutta High Court. The Tribunal examined these arguments and concluded that the ITO was not permitted to withdraw a benefit given to the assessee while implementing an appellate order.

Referring to the Calcutta High Court decision in a similar context, the Tribunal emphasized that the ITO cannot disturb findings from the original assessment that were not in dispute. The Tribunal held that the ITO exceeded his jurisdiction by attempting to disallow a sum that was not appealed against, emphasizing that the ITO should adhere to the directions of the appellate authorities without altering the original assessment findings. Therefore, the Tribunal directed the ITO to include the disputed sum in the valuation of shares as on 1-1-1954, as done in the original assessment, as it was beyond the ITO's jurisdiction to disturb the assessment proceedings in any manner other than to give effect to the appellate order.

In conclusion, the appeals were allowed, and the Tribunal directed the ITO to include the disputed sum in the valuation of shares as on 1-1-1954, maintaining the original assessment findings and adhering to the directions of the appellate authorities.

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