The High Court granted a certificate of fitness for appeal under Section 261 of the Income Tax Act in view of the fact that they had taken a view companytrary to the view adopted by the Madras High Court on this question.
The facts of the case, as stated in the judgment of the High Court, are as under The assessee is an individual and the assessment year under reference is assessment year 1969 70, the year of account being the calendar year 1968.
Thus the value of the shares received by the assessee exceeded the value which he had paid for these shares by Rs.30,450/ .
The capital received by the Company had been returned to the shareholder.
The Appellate Assistant Commissioner as well as the Tribunal upheld the view taken by the Income Tax Officer.
The assessee held 297 redeemable preference shares of M s. Universal Corporation Private Limited a companypany incorporated under the Companies Act hereinafter referred to as the Company .
The Income Tax Office, however, rejected the companytentions raised on behalf of the assessee and brought capital gains arising out of the redemption of the shares to tax.
The Company decided to redeem the preference shares and the assessee received Rs.2,97,000/ face value of the shares held by her in the year of account relevant to the assessment year under reference.
The assessee had purchased these shares for Rs.2,68,550/ .
