https://www.taxtmi.com/caselaws?id=39926 A shareholder who renounces the right to subscribe for new shares realises a capital receipt from an accretion to existing shareholding, but the taxable gain must be computed as the net result of the composite transaction. Ordinary commercial accounting principles apply, so the receipt from the renunciation is reduced by the diminution in value of the original shares caused by the issue of rights shares. On that basis, the depreciation suffered by the existing shares is deductible in determining the real capital gain, and the net gain alone is brought to tax. en-us Mon, 31 Oct 1966 00:00:00 +0530 Tue, 12 Aug 2014 12:07:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=39926 A shareholder who renounces the right to subscribe for new shares realises a capital receipt from an accretion to existing shareholding, but the taxable gain must be computed as the net result of the composite transaction. Ordinary commercial accounting principles apply, so the receipt from the renunciation is reduced by the diminution in value of the original shares caused by the issue of rights shares. On that basis, the depreciation suffered by the existing shares is deductible in determining the real capital gain, and the net gain alone is brought to tax. Case-Laws Income Tax Mon, 31 Oct 1966 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=39926