Shreyaben R. Mukharjee vs Commissioner of Income Tax

R.C. Mankad, J.—The Income Tax Appellate Tribunal has referred to us for our opinion the following question u/s 256(1) of the Income Tax Act, 1961 :

"Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that for the purposes of working out the capital gains arising out of the sale of 300 shares of Messrs. Alembic Chemical Works Co. Ltd., the cost of the shares to be deducted from the sale proceeds should be worked out by spreading the cost at which the original shares were purchased over the original shares and the bonus shares ?"

As held by this court in Income Tax References Nos. 21 and 22 of 1978, decided on June 15, 1981, and Alembic Chemical Works Co. Ltd. (No. 2) Vs. Commissioner of Income Tax, , decided today, the above question is directly covered by the decision of the Supreme Court in Commissioner of Income Tax, Bihar Vs. Dalmia Investment Co. Ltd., and (1970) 78 ITR 16 (SC) . We, therefore, do not consider it necessary to set out the facts involved in this reference. Respectfully following the aforesaid decisions of the Supreme Court and for the reasons recorded in our judgment in Income Tax Reference No. 35 of 1980, we answer the question which has been referred to us for our opinion, in the affirmative and against the assessee. Reference answered, accordingly, with no order as to costs.

At this stage, Mr. K. H. Kaji, learned counsel for the assessee, prays that this may be certified to be a fit case for appeal to the Supreme Court u/s 261 of the Income Tax Act, 1961. Since, in our opinion, the question which has been referred to us is directly covered by a decision of the Supreme Court, as referred to above, we do not consider this case to be fit for appeal to the Supreme Court. We, therefore, reject the prayer of Mr. Kaji.