TaxTMI 
TaxTMI 
1978 (1) TMI 61
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....h its head office at Indore and branches at various other places in Madhya Pradesh. The assessee carries on business in grain, money-lending, etc., and also runs a cotton ginning and pressing factory. The assessment year is 1962-63 and the previous year ended on November 8, 1961. The assessee claimed a capital loss of Rs. 93,917 in respect of its Sanawad branch as a factory named Kailash Ginning Factory at Sanawad was purchased by the Hindu undivided family, M/s. Binodiram Balchand, in Samvat year 1986-87 for an amount of Rs. 1,25,000. Eventually, the said Hindu undivided family wrote down the value of the factory to Rs. 35,000 in Samvat year 2003-2004. Later, there was a partial partition in the said Hindu undivided family and in Samvat y....
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....ssets to the assessee-firm should be taken to be Rs. 1,25,000 within the meaning of section 49(1) of the Act. The Appellate Tribunal accepted the contention of the assessee and held that considering the language of section 49(1) the value of the ginning factory in the hands of the firm should be taken as Rs. 1,25,000 which was the value for its original acquisition by the Hindu undivided family and thus the Tribunal allowed the capital loss of Rs. 90,753. The department thereafter sought a reference and at the instance of the department the present reference has been made by the Tribunal. Learned counsel appearing for the department contended that in view of the decision in Kalooram Govindram v. Commissioner of Income-tax [1965] 57 ITR 335....
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....e previous owner of the property acquired it, as increased by the cost of any improvement of the assets incurred or borne by the previous owner or the assessee, as the case may be. Explanation.--In this sub-section the expression 'previous owner of the property' in relation to any capital asset owned by an assessee means the last previous owner of the capital asset who acquired it by a mode of acquisition other than that referred to in clause (i) or clause (ii) or clause (iii) of this sub-section. (2) Where the capital asset being a share or shares in an amalgamated company which is an Indian company became the property of the assessee in consideration of a transfer referred to in clause (vii) of section 47, the cost of acquisition of t....