TaxTMI 
TaxTMI 
1986 (7) TMI 142
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....issue for our consideration in this appeal is whether the Commissioner (Appeals) has erred in holding that the assessee is entitled for substitution of fair market value as on 1-1-1964 in respect of shares held by it in the amalgamated company as on 1-7-1974. 2. The relevant facts are that the assessee, an Indian company, is assessed as agent of an English company J.P. Coats Ltd. for the assessment year 1978-79. During the accounting year ending on 31-12-1978, the assessee sold 9,60,617 shares in Madura Coats Ltd., an Indian company, for a sum of Rs. 75,32,828. The assessee claimed before the ITO that the expenses in connection with the sale was of an amount of Rs. 96,061 so that the net sale price was Rs. 74,36,767. For the purpose of cap....
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....e shares are sold, which came into existence on 1-7-1974, the assessee cannot opt the value of those shares as on 1-1-1964 when those shares were not at all in existence. Being aggrieved, the assessee carried the matter before the Commissioner (Appeals) after referring the provisions of sections 47, 49 and 55 of the Act, held that the assessee had the option to value the cost of shares as on 1-1-1964. 3. Being aggrieved, the revenue came in appeal before us. The submission of the learned departmental representative, Shri Subramanian, was that when those shares were not in existence at all on 1-1-1964, the assessee cannot opt the value of those shares as on 1-1-1964 as the cost of those shares. He drew our attention to the provisions of sec....
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....w company Madura Coats Ltd., which came into existence with effect from 1-7-1974 issued shares to the shareholders of those three old companies in lieu of the shares issued by those three companies. Now the limited issue before us is whether the new shares which were issued by Madura Coats Ltd. with effect from 1-7-1974 and sold thereafter by the assessee, has the assessee the option available for determining the cost of those new shares as on 1-1-1964. In other words, whether the assessee can ask the value of those shares as a cost for capital gain tax on the basis of the fair market value as on 1-1-1964. Provisions of section 47(vi) and (vii) provide, any transfer, in a scheme of amalgamation, of a capital asset by the amalgamating compan....
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....These are---A & F Harvey Ltd., J & P Coats (India) Ltd. and Madura Mills Ltd. Section 55 of the Act provides, the meaning of 'adjusted', 'cost of improvement' and 'cost of acquisition'. Cost of adjusted, cost of any improvement, they are provided in sub-section (1) of section 55. What is the cost of acquisition of the asset for the purpose of option of section 55, that is, given in sub-section (2) of section 55. Sub-section (2) provides that for the purpose of sections 48 and 49 of the Act, 'cost of acquisition' in relation to a capital asset, (i) where the capital asset became the property of the assessee before 1-1-1964, means the cost of acquisition of the asset to the assessee or the fair market value of the asset on 1-1-1964 at the opt....
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....axing statute. The provisions of a taxing statute have to be read and understood according to the language of the statute and if the plain language compels the Court to adopt an approach different from that dictated by any rule of logic the Court may have to adopt it. Normally, unless it is shown that the context calls for a different meaning to be given to the term used in the same section, one would be justified in assuming that the term has been used so as to have the same meaning. The assessee's counsel, Shri Bhakta, relied on the decision of their Lordships of the Bombay High Court in the case of Harish Mahindra. In that case, the assessee acquired share of Rs. 500 before 1-1-1954; thereafter he sub-divided it into shares of Rs. 10 eac....