Dipak Kumar Sen, J. - (1.) The dispute in the reference arises out of computation of capital gains on the sale of 20,000 shares of Gwalior Rayon & Silk Mfg. Co. Ltd., by Sutlej Cotton Mills Ltd., the assessee, in the assessment year 1970-71, the relevant previous year having ended on the 31st March, 1970.
(2.) The facts found and/or admitted are as follows I The assessee acquired the said shares in the year 1955 at a price of Rs. 10 per share. Subsequently, the assessee received 20,000 bonus shares in respect of the said original shares. The assessee sold 20,000 of the said original shares during the relevant period. The ITO computed the capital gains accruing in the hands of the assessee by working out the cost of acquisition of the original shares by spreading out the initial cost between the original shares as also the bonus shares.
(3.) On an appeal preferred by the assessee, the AAC upheld the order of the ITO.;