1987 (11) TMI 42

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....JANEYULU J.-These two references made by the Income-tax Appellate Tribunal at the instance of the assessee relate to the assessment years 1977-78 and 1978-79. The question referred for the consideration of this court is : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the cost of right shares cannot be taken into account for working out t....

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....see in the previous years relevant to the assessment years 1977-78 and 1978-79 were not the right shares as such. They could have come from either the originally subscribed shares or the bonus shares. For the purpose of determining the actual cost of the original shares, the cost of the original shares was duly spread over the bonus shares also following the principle set out by the Supreme Court ....

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.... sale of the shares. It is in these circumstances that the assessee asked for and obtained the present reference to this court for consideration. We think the tax authorities were correct in determining the cost of the shares without taking into consideration the right shares. The principle enunciated by the Supreme Court in Gold Mohore Investment Company's case [1969] 74 ITR 62 regarding the s....