30 as premium.
the intervening days 2nd and 3rd june being official holidays there were to be no transactions on those days.
on behalf of the appellant the plea was that on the issue of the new ordinary shares the value of her old ordinary shares depreciated because the assets of the companypany remained stationary while the number of shares increased.
the board of directors of the native stock and share association limited had passed a resolution that the transactions in these shares were to be cum right up to and including ist june 1956 and were to be ex rights from 4th june 1956 onwards.
she was also given the option of either taking the shares wholly or partly or renumberncing them either wholly or partly in favour of any other person or persons.
it was claimed by the appellant that as a result of this depreciation in the price of her old ordinary shares she suffered a capital loss in those shares to the extent of rs.
it was companymon ground before the income tax authorities as well as the tribunal that this amount received by her was a capital gain and the whole of this amount was sought to be taxed as capital gain received by the appellant.
appeal from the judgment and order dated august 24/25 1962 of the bombay high companyrt in income tax reference number 12 of 1961.
45262/ 50p which she realised on selling her right to take the new ordinary shares.
this payment was to represent rs.
45.262.50 np.
k. aiyar and r. n. sachthey for the respondent.
198/75 np on 4th june 1956.
45262/50 np.
there was thus a fall in the market quotation of old shares of rs.
the judgment of the companyrt was delivered by bhargava j. this appeal by certificate granted by the high court of bombay under section 66a 2 of the indian income tax act 1922 hereinafter referred to as the act is directed against the answer returned by the high companyrt to the following question referred to it by the income tax appellate tribunal under s. 66 1 of the act whether having regard to the provisions of section 12b ii the assessee is entitled to claim a deduction from the full value of the consideration of rs.
54/25p per share.
the market quotation of the old tata ordinary shares was rs.
the appellant chose to renumbernce her right to all the 710 ordinary shares instead of taking the shares herself and when renumberncing the shares she sold them in the open market on 12th june 1956 as a result of which she actually realised a sum of rs.
37630 and she was entitled to set off this loss against the capital gain of rs.
in pursuance of this resolution an offer was made to the appellant by the companypany by its circular letter dated 15th may 1956 that she was in terms of the resolution entitled to apply for 710 new ordinary shares to be paid for at the rate of rs.
civil appellate jurisdiction civil appeal number 757 of 1965.
75 as the face value of the share and rs.
received for the capital asset the sum of rs.
this plea put forward on behalf of the appellant was rejected by the income tax authorities as well as by the income tax appellate tribunal.
253 per share on i st june 1956 and fell to rs.
the appellant was holding 710 ordinary shares of the tata iron and steel companypany limited hereinafter referred to as the company which she had inherited some time prior to ist january 1954 as an investment.it was admitted that she was number a dealer in shares.
j. kolah and o. c. mathur for the appellant.
the case arose out of proceedings for assessment of the ap pellant for the assessment year 1957 58 the companyresponding previous year being the financial year 1956 57.
under aspecial resolution passed at an extraordinary general meetingof the companypany on 12th march 1956 the appellant as holderof 710 ordinary shares became entitled to purchase new ordinary shares issued in the ratio of one new ordinary share for one existing ordinary share as held on 26th april 1956.
105 per new ordinary share.
t. desai o. c. mathur for interveners.
