2016 (6) TMI 958

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....ck and depreciation on such reduced block can only be allowed to the appellant, as also the cost of bonus shares are to be taken at rupees nil even if the said bonus shares are issued prior to the amendment of Section 55(2)(aa) of the Act Income Tax Act . 2. The facts of the case are that appellant was holding two units which was sought to be disposed of during the financial year 1996-97 at a price of Rs. 1.00 Crore and other unit at a price of Rs. 40 Lacs. The appellant got the bonus share prior to the amendment to Section 55(2)(aa) of the Act and when the original shares were sold prior to the assessment year under consideration, the average cost of the shares were taken into consideration and not the full cost while quantifying the capi....

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....l and contended that the contentions of the appellant for the year 1997-98 was considered. 5.1 Mr.Soparkar, learned Senior Counsel for the appellant has also taken us to paragraph No.21 of the order of the Tribunal with regard to issue of cost of bonus shares allotted on 30th January, 1993 at Rs.Nil as per the amended provisions of Section 55(2)(aa) of the Act, instead of at their average cost while computing the long term capital gains and has relied upon the decision in case of Escorts Farms (Ramgarh) Ltd. v. Commissioner of Incometax 222 ITR 509 wherein judgment of the Constitutional Bench in case of CIT V. Gold Co. Ltd. [1970] 78 ITR 16 has been referred. He has therefore contended that the average share price ought to have been taken ....