IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX REFERENCE NO.7 OF 1994 INCOME TAX REFERENCE NO.7 OF 1994 INCOME TAX REFERENCE NO.7 OF 1994 Ceat International S.A. C/o. Ceat Tyres of India Ltd. ..Applicant. V/s. The Commissioner of Income tax ..Respondent. Mr.Nishant Thakker with Rajesh Poojari i/b. Mulla & Mulla for applicant. Mr.Parag Vyas i/b. P.S.Sahadevan for respondent. CORAM : V.C.DAGA AND CORAM : V.C.DAGA AND CORAM : V.C.DAGA AND J.P.DEVADHAR, JJ. J.P.DEVADHAR, JJ. J.P.DEVADHAR, JJ. DATED : 8TH APRIL, 2009. DATED : 8TH APRIL, 2009. DATED : 8TH APRIL, 2009. P.C. :- P.C. :- P.C. :- 1. The Tribunal has forwarded the statement of case framing the following substantial question of law for the opinion of this Court:- " Whether on the facts and in the circumstances of the case, the Tribunal was justified in rejecting the contention of the assesses that the profits / losses arising on the sale of 58776 shares of Ceat Tyres of India Ltd. held by it when subscription in respect of it was made in foreign currency should be computed first in Swiss Francs and then converted into Indian rupees at the exchange rate prevailing on the date of sale and thereby rejecting the claim for the capital loss of Rs.2,05,07,527/- and bringing to tax in its place a gain of Rs.42,89,472/- ? " - = : 2 : = - 2. Learned counsel appearing for the applicant fairly states that the above issued is squarely covered by the Judgment of this Court in the case of Asbestos Cement Ltd. V/s. Commissioner of Income Tax Asbestos Cement Ltd. V/s. Commissioner of Income Tax Asbestos Cement Ltd. V/s. Commissioner of Income Tax reported in 203 I.T.R. 358 203 I.T.R. 358 203 I.T.R. 358 wherein the Division Bench has held as under :- " Held, that the place where the assessee resided or the currency in which the money was deposited in the bank for the purpose of purchase, etc. were not relevant factors for determining the income arising from transactions where the cost of acquisition and consideration for transfer, etc. were all expressed in Indian rupees. In this case, the transaction of transfer of shares took place in India. The acquisition of shares was made in India. The cost of acquisition was expressed in terms of Indian rupees as also the sale price. Under the circumstances, the question of converting the cost of acquisition and sale price into foreign currency, at the rates prevailing at the relevant time, for finding out the capital gains in foreign currency and then converting the same into Indian rupees to find out the amount chargeable to income-tax under the head "Capital gains" could not arise. " 3. In the above view of the matter, the issue is answered in the affirmative in favour of the revenue and against the assessee. (V.C.DAGA, J.) (V.C.DAGA, J.) (V.C.DAGA, J.) - = : 3 : = - (J.P.DEVADHAR, J.) (J.P.DEVADHAR, J.) (J.P.DEVADHAR, J.)