2024 (8) TMI 128

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....essee. 2. Learned counsel submits that there was no actual loss on account of reduction of the share price and the Tribunal has erred in considering the notional net business loss. 3. Briefly the facts of the case are that the assessee-company filed its return of income in the status of Investment Company. It has claimed capital loss due to fall in value of equity shares of M/s Vardhman Spinning and General Mills Limited, amounting to Rs. 1,94,54,400/-. It is also claimed that capital loss on account of sale of non-convertible portion of debentures of M/s Vardhman Spinning and General Mills Ltd. amounting to Rs. 9,87,485/- and also claimed exemption under Section 10 (2A) of the Act, 1961 (for short 'the Act, 1961') of an amount of Rs.....

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.... the appeal of the assessee, whereafter, the case was taken up before the ITAT. 8. The ITAT examined the matter in the light of judgment passed by the Hon'ble Supreme Court in the case of Miss Dhun Dadabhoi Kapadia vs. CIT 1967 (63) ITR 651 (SC), wherein, it was held as under:- ""A concomitant of the acquisition of the new right was the depreciation in the 'value of the old shares, and the depreciation may, in a commercial sense, be deemed to be the value of the right which she subsequently transferred. The capital gain made by her would, therefore, be represented only by the difference between the money realised on transfer of the right, and the amount which she lost in the form of depreciation of her original shares in ord....

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....lating the actual amount does not very and is the same. We do not see any distinction which makes a difference between the facts in the case before us and those before the Supreme Court in Dhun Kapadia's case. We are, therefore, bound by the principles laid down by the Supreme Court in that case and we propose to decide this reference on the basis of those principles". 10. It therefore set aside the order of the AO and the order passed by the CIT (A) and directed the AO to allow the carry forward of business loss of Rs.1,94,54,400/- to subsequent years. 11. We find that the fall in the value has been worked out based on the market quotation in Ludhiana Stock Exchange, wherein prior to the right issue on 13.10.1992, last-c....