Law:

Section:

Section 48 of the Income-tax, Act 1961 [Corresponding to section 12B of the Indian Income-tax Act, 1992] - Capital gains - Computation of - Assessment year 1959-60 - Whether capital loss for assessment year 1951-52, when tax on capital gains was not in force, could be carried forward and set off against capital gains for assessment year 1959-60 - Held, no - Whether in absence of relevant material enabling Income-tax Officer to determine fair market value of asset as on 1-1-1954, benefit of third proviso to section 12B(2) of 1922 Act could not be given merely because there was possibility of increase in value of shares on account of increase in earning capacity of company - Held, yes FACTS The assessee is an association of persons and the relevant assessment year is 1959-60. In January, 1951, the assessee purchased 3,040 shares of G. Ltd. for Rs. 1,52,000. Out of these shares it transferred 700 shares to J Ltd. for a sum of Rs. 35,000 on 1st of April, 1953 leaving a balance of 2,340 shares valued at Rs. 1,17,000. Due to certain reasons, on 15th December, 1954, the assessee wrote off a sum of Rs. 1,16,999 from the value of 2,340 shares. The result was that in the assessee's books the value of these 2,340 shares was shown as rupee one only. The assessee claimed the amount written off in its assessment for the year 1955-56, which claim was disallowed. Subsequently, the assessee repurchased 700 shares which had been sold to J. Ltd. for Rs. 35,000. Thus it became possessed of 3,040 shares, but in the account books these shares were valued at Rs. 35,001. In the relevant accounting year relevant to the assessment year 1959-60, the assessee sold these 3,040 shares for a sum of Rs. 3,04,000. After deducting the sum of Rs. 35,001, the book value of these shares, there was a surplus of Rs. 2,68,999. It may also be mentioned that during the year 1951-52, the assessee had made a claim for a sum of Rs. 1,05,067 as loss suffered by it. This claim was rejected by the income-tax authorities on the ground that the loss claimed by the assessee was of a capital nature and as such it cold not be deducted from the assessee's income for that year. The tax on capital gain was not in…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492