CIT v. Dalmia Investment Co. Ltd.

52 ITR 567Supreme Court of India1964#6512 most cited
18

judgments rely on this decision, according to BharatTax’s citation analysis of 292,668 Indian tax judgments — from 2006 to 2025.

Sections most often in play

Section 143(3)Section 45Section 48Section 49(4)Section 54FSection 56(2)(vii)(c)Section 10(33)Section 10(38)

Issues it is cited on

section 56(2)(vii)(c)section 56(2)(viia)section 56(2)(vii)fair market valuesection 56(2)section 56long term capital gainincome from other sourcestransfercompanysection 143(3)business

Judgments citing CIT v. Dalmia Investment Co. Ltd.

DCIT CENTRAL CIRCLE 05 , DELHI vs. DEEPAK KOTHARI , KANPUR

In the result, the appeal filed by the assessee is allowed

ITA 1834/DEL/2021[20017-18]Status: DisposedITAT Delhi06 Aug 2025

Bench: SHRI S. RIFAUR RAHMAN (Accountant Member), SHRI VIMAL KUMAR (Judicial Member)

For Appellant: Dr. Rakesh Gupta, AdvocateFor Respondent: Shri Dayainder Singh Sidhu, CIT DR
Section 143(3)Section 49(4)Section 56(2)(vii)

…effect transpires is that a share gets spilt (in the same proposition for all the shareholders), as for example by a factor of two in case of a 1: 1 bonus issue. (iv) Reference in this regard may be to the decision in CIT vs Dalmia Investment Co. Ltd. [1964) 52 ITR 567 (SC) as well as in Khoday Distilleries Ltd. (Supra), wherein reference stands made to the former, also quoting there from besides inter alia to Hunsur Plywood Works Ltd vs CIT [1998} 229ITR 112 (SC), where the same were referred to as 'capitalization shares'. (v) In other words, there is no receipt of any property by the shareholder, and what stan…

DEEPAK KATHARI,KANPUR vs. ACIT, CC-5, NEW DELHI

In the result, the appeal filed by the assessee is allowed

ITA 1205/DEL/2021[2017-18]Status: DisposedITAT Delhi06 Aug 2025AY 2017-18

Bench: SHRI S. RIFAUR RAHMAN (Accountant Member), SHRI VIMAL KUMAR (Judicial Member)

For Appellant: Dr. Rakesh Gupta, AdvocateFor Respondent: Shri Dayainder Singh Sidhu, CIT DR
Section 143(3)Section 49(4)Section 56(2)(vii)

…effect transpires is that a share gets spilt (in the same proposition for all the shareholders), as for example by a factor of two in case of a 1: 1 bonus issue. (iv) Reference in this regard may be to the decision in CIT vs Dalmia Investment Co. Ltd. [1964) 52 ITR 567 (SC) as well as in Khoday Distilleries Ltd. (Supra), wherein reference stands made to the former, also quoting there from besides inter alia to Hunsur Plywood Works Ltd vs CIT [1998} 229ITR 112 (SC), where the same were referred to as 'capitalization shares'. (v) In other words, there is no receipt of any property by the shareholder, and what stan…

PRAVEEN RANJAN SINHA,GURGAON vs. DCIT, CIRCLE-3(1), GURGAON, GURGAON

In the result, the appeal of the assessee is allowed and Stay Application of the assessee is dismissed as infructuous

ITA 399/DEL/2024[2015-16]Status: DisposedITAT Delhi08 Jul 2024AY 2015-16

Bench: Shri Kul Bharat & Shri M. Balaganeshpraveen Ranjan Sinha, Vs. Dcit, Icb 141, The Icon, Dlf Circle-3(1), City, Phase-V, Gurgaon, Gurgaon Haryana (Appellant) (Respondent) Pan: Ardps3000N Sa No. 57/Del/2024 (In Ita No. 399/Del/2024) (Assessment Year: 2015-16) Praveen Ranjan Sinha, Vs. Dcit, Icb 141, The Icon, Dlf Circle-3(1), City, Phase-V, Gurgaon, Gurgaon Haryana (Appellant) (Respondent) Pan: Ardps3000N Assessee By : Shri Sudesh Garg, Adv Ms. Bhavya Garg, Adv Revenue By: Shri Dharambir Singh, Cit Dr Date Of Hearing 08/04/2024 Date Of Pronouncement 08/07/2024

For Appellant: Shri Sudesh Garg, AdvFor Respondent: Shri Dharambir Singh, CIT DR
Section 143(3)Section 145Section 2Section 250Section 55(2)(aa)Section 94(8)

…Court (SLP(C) No: 12378/2020]is not applicable on facts of the appellant's case. 3. The Ld. CIT(A) has grossly erred on facts and in law in cryptically holding that the Hon'ble Supreme Court's judgement in the case of Dalmia Investment Company Limited [1964] (52 ITR 567) with regard to the valuation of the bonus share is applicable to the case of the appellant notwithstanding the subsequent amendment in the section 55(2)(aa) (B) (iiia) as well as section 2(42A)(f) of Income Tax Act and the CBDT Circular No. 717 dated 14.08.1995. 4. The Ld. CIT(A) has grossly erred on facts and in law in cryptically holding that t…

DCIT CENTRALCIRCLE-2(3), CHENNAI vs. M/S TANGI FCILITY SOLUTIONS PVT. LTD., CHENNAI

The appeal stand dismissed

ITA 735/CHNY/2023[2017-18]Status: DisposedITAT Chennai03 Jun 2024AY 2017-18

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am आयकरअपीलसं./ Ita No.735/Chny/2023 (िनधा*रणवष* / Assessment Year: 2017-18) Dcit M/S. Tangi Facility Solutions Pvt. Ltd. बनाम/ Central Circle-2(3) Old No.42, New No.2, Chennai-34. Luz Avenue, Mylapore, Vs. Chennai-600 004. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aafct-1408-B (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ" कीओरसे/ Appellant By : Mrs. Swapna Nanu Ambath (Cit)- Ld. Dr " थ"कीओरसे/Respondent By : Shri G. Shivakumar (Advocate)-Ld. Ar सुनवाई की तारीख/Date Of Hearing : 18-03-2024 घोषणा की तारीख /Date Of Pronouncement : 03-06-2024

For Appellant: Mrs. Swapna Nanu Ambath (CIT)- Ld. DRFor Respondent: Shri G. Shivakumar (Advocate)-Ld. AR
Section 143(3)Section 147Section 148Section 2(22)(b)Section 56(2)Section 56(2)(viia)

…ncrease in the value of asset due to bonus shares. In fact, individual share cost shall reduce in accounting parlance but overall cost shall remain the same. The assessee referred to the decision of Hon’ble Supreme Court in CIT vs. Dalmia Investment Co. Ltd. (52 ITR 567) as well as in Hansur Plywood Works Ltd. vs CIT (229 ITR 112) holding that bonus shares do not amount to distribution of accumulated profit of the company. It was further submitted that the bonus was not from profit but out of securities premium account which could not be used for paying dividend. 2.2 However, Ld. AO, considering the provisions of…

JCIT, SPECIAL RANGE-10, NEW DELHI vs. BHANU CHOPRA, NEW DELHI

In the result, appeal filed by the Revenue Department stands dismissed

ITA 167/DEL/2019[2015-16]Status: DisposedITAT Delhi29 Apr 2022AY 2015-16

Bench: Shri R.K. Panda & Shri N. K. Choudhryjt. Commissioner Of Income Vs. Sh. Bhanu Chopra, Tax,Special Range-10, M-140, Greater Kailash-Ii, New Delhi Delhi Pan: Agwpc5625R (Appellant) (Respondent)

For Appellant: ShriIshtiyaqueAdhmed, Ld. CITFor Respondent: Shri R. K. Sharma, Ld. Adv
Section 143(3)Section 2(24)(xv)Section 250(6)Section 49(4)Section 55Section 55(2)(a)Section 56(2)Section 56(2)(vii)

…rom the holder of the shares, which is reflected in the decrease in the intrinsic value of the original shares held by him. In this regard, reliance is placed on the decision of the Hon'ble Supreme Court in the case of CIT v. Dalmia Investment Co. Ltd. (1964) 52 ITR 567 (SC). In the said case, the issue was valuation of bonus shares and it was observed by the Hon‟ble Court that - ……………………………………………………………… ……………………………………………………………… ……………………………………………………………… ……………………………………………………………… ……………………………………………………………… ………………………………………………………………. . Further, in the case of Dr. RajanPai, Bangalore Vs Department of Income Tax by ITAT…

JCIT, SPECIAL RANGE-10, NEW DELHI vs. ARVIND SEHGAL, NEW DELHI

ITA 168/DEL/2019[2015-16]Status: DisposedITAT Delhi22 Feb 2022AY 2015-16

Bench: Shri R.K. Panda & Shri N. K. Choudhryjt. Commissioner Of Income Vs. Sh Arvind Sehgal, Tax,Special Range-10, E-70, First Floor, New Delhi Kalkaji, Delhi Pan: Aohps1311R (Appellant) (Respondent)

For Appellant: Shri Manu Chourasia, Sr. DRFor Respondent: Shri Manu K. Giri, Ld. And Ms. Sonia Dodeja, Ld. Advs
Section 2(24)(xv)Section 250(6)Section 55Section 56(2)Section 56(2)(vii)

…, the allotment of bonus units was made to the appellant on the basis of his holding of the original units of the said fund. In this regard reliance is placed on the decision of the Hon‟ble Supreme Court in the case of CIT v. Dalmia Investment Co. Ltd. (1964) 52 ITR 567 (SC).” 3.4 We observe that the ld.CIT(A) while controverting the finding of the AO and coming to the conclusion that provisions of section u/s 56(2)(vii)(c) are not applicable to the case of the Assessee, also followed the judgment of the Hon‟ble Apex Court in the case of CIT Vs. Dalmia Investment Co. Ltd (1964) 52 ITR 567 (SC) wherein, it was he…

DEPUTY COMMISSIONER OF INCOME-TAX vs. CLARION TECHNOLOGIES PVT. LTD.,, PUNE

In the result, the appeal of assessee is allowed

ITA 421/PUN/2016[2009-10]Status: DisposedITAT Pune13 Jan 2022AY 2009-10

Bench: Shri R.S. Syal & Shri S.S. Viswanethra Ravi

For Appellant: Shri V.K. ShridharFor Respondent: Shri Deepak Garg
Section 10ASection 10BSection 143(2)Section 143(3)Section 147Section 148

…r rectifying the assessment as the profit from the sale of said bogus shares had been under assessed. We note that the AO attempted for reassessment in view of the decision of Hon‟ble Supreme Court in the case of CIT Vs. Dalmia Investment Co. Ltd. reported in 52 ITR 567 wherein the Hon‟ble Supreme Court directed the cost of bonus shares to decide in a certain manner. The Hon‟ble High Court of Calcutta held the decision of Hon‟ble Supreme Court was an information perfectly justified to take proceedings u/s. 147 within four years of the end of the assessment year, by holding so quashed the proceedings initiated u/s…

CLARION TECHNOLOGIES PVT. LTD.,,PUNE vs. DEPUTY COMMISSIONER OF INCOME-TAX,,

In the result, the appeal of assessee is allowed

ITA 331/PUN/2016[2009-10]Status: DisposedITAT Pune13 Jan 2022AY 2009-10

Bench: Shri R.S. Syal & Shri S.S. Viswanethra Ravi

For Appellant: Shri V.K. ShridharFor Respondent: Shri Deepak Garg
Section 10ASection 10BSection 143(2)Section 143(3)Section 147Section 148

…r rectifying the assessment as the profit from the sale of said bogus shares had been under assessed. We note that the AO attempted for reassessment in view of the decision of Hon‟ble Supreme Court in the case of CIT Vs. Dalmia Investment Co. Ltd. reported in 52 ITR 567 wherein the Hon‟ble Supreme Court directed the cost of bonus shares to decide in a certain manner. The Hon‟ble High Court of Calcutta held the decision of Hon‟ble Supreme Court was an information perfectly justified to take proceedings u/s. 147 within four years of the end of the assessment year, by holding so quashed the proceedings initiated u/s…

DCIT, FARIDABAD vs. SMT. MAMTA BHANDARI, DELHI

In the result, the appeal of the Revenue is dismissed

ITA 1716/DEL/2016[2012-13]Status: DisposedITAT Delhi29 Nov 2019AY 2012-13

Bench: Ms. Sushma Chowla & Shri O.P. Kantassessment Year: 2012-13

Section 132Section 153ASection 56Section 56(2)(vii)

…effect transpires is that a share gets spilit (in the same proposition for all the shareholders), as for example by a factor of two in case of a 1:1 bonus issue. (iv) Reference in this regard may be to the decision in CIT vs Dalmia Investment Co. Ltd. [1964] 52 ITR 567 (SC) as well as in Khoday Distilleries Ltd. (Supra), wherein reference stands made to the former, also quoting therefrom besides inter alia to Hunsur Plywood Works Ltd vs C1T[ 1998] 229 ITR 112 (SC), where the same were referred to as ‘capitalization shares. (v) In other words, there is no receipt of any property by the shareholder, and what stan…

DCIT, FARIDABAD vs. SMT. MAMTA BHANDARI,, DELHI

In the result, appeal of the Revenue dismissed

ITA 5681/DEL/2016[2010-11]Status: DisposedITAT Delhi10 Jul 2019AY 2010-11

Bench: Shri Bhavnesh Saini & Dr. B.R.R. Kumar

For Appellant: Shri R.S. Ahuja, C.AFor Respondent: Shri Sanjay Shivam, CIT-D.R
Section 132Section 153ASection 56(2)(vii)

…effect transpires is that a share gets spilt (in the same proposition for all the shareholders), as for example by a factor of two in case of a 1:1 bonus issue. (iv) Reference in this regard may be to the decision in CIT vs Dalmia Investment Co. Ltd. [1964] 52 ITR 567 (SC) as well as in Khoday Distilleries Ltd. (Supra), wherein reference stands made to the former, also quoting there from besides inter alia to Hunsur Plywood Works Ltd vs CIT[ 1998] 229 ITR 112 (SC), where the 10 ITA.No.5681/Del./2016 Smt. Mamta Bhandari, Delhi. same were referred to as ‘capitalization shares’. (v) In other words, there is no r…

ANALJIT SINGH,DELHI vs. DCIT, CIRCLE- 16(2), DELHI

In the result, the appeal of the assessee is partly allowed

ITA 4737/DEL/2017[2014-15]Status: DisposedITAT Delhi01 Dec 2017AY 2014-15

Bench: Shri Amit Shukla & Shri O.P.Kant

Section 143(3)Section 2Section 50D

…IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: ‘A’ NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI O.P.KANT, ACCOUNTANT MEMBER I.T.A .No.-4737/Del/2017 (ASSESSMENT YEAR-2014-15) Shri Analjit Singh, Vs. DCIT, 15, Aurangzeb Road, Delhi-110011. Circle-16(2), Delhi. PAN-ABLPS7514D (APPELLANT) (RESPONDENT) Appellant by Sh. Ajay Vohra, Sr. Adv. & Sh. Gaurav Jain, Adv. Respondent by Sh. G.C.Srivastava, Special Counsel & Sh. Suvinaj Kumar Dash, Adv. Date of Hearing 06.11.2017 Date of Pronouncement 01.12.2017 ORDER PER AMIT SHUKLA, JM The aforesaid appeal has been filed by the assessee against the imp…

ITO 8(1)(2), MUMBAI vs. SHAILESH D. SHAH, MUMBAI

In the result the appeal filed by the revenue is dismissed

ITA 7126/MUM/2013[2010-11]Status: DisposedITAT Mumbai26 Oct 2016AY 2010-11

Bench: Shri B.R. Baskaran (Am)& Ramlal Negi (Jm)

Section 2Section 2(22)Section 2(22)(a)

…s, and the following passages from the decision of Hon'ble Gujarat High Court in the case of Sashibala Navnitlal v. CIT (1964) 54 ITR 478 (Guj), lucidly explains the legal position : "As observed by Hidayatullah J. in CIT v. Dalmia Investment Co. Ltd. (1964) 52 ITR 567 (SC) after the accumulated profits are converted into capital and bonus shares are issued credited as fully paid up "the company employs that money not as reserves of profit, but as its proper capital issued to and contributed by the shareholder". If this be the correct legal analysis of what happens when bonus shares are issued by a company, it i…

BLOOM PACKAGING P LTD,MUMBAI vs. ASST CIT CEN CIR 39, MUMBAI

In the result, appeal of the assessee is allowed

ITA 4663/MUM/2015[2010-11]Status: DisposedITAT Mumbai19 Oct 2016AY 2010-11

Bench: Shri D. Karunakara Rao & Shri Amit Shukla

For Appellant: Shri Precy PardiwalaFor Respondent: Smt. Vinita Menon, DR
Section 115Section 115JSection 14A

…also a settled proposition in law that the expression „release of capital assets‟ is not attracted in factual matrix where certain bogus shares are issued without any consideration by the company to the shareholders [CIT vs. Dalmia Investment Company Limited [52 ITR 567 (SC)]. It implies transfer of shares of a company ipso facto does not amount to release of any capital asset of the company as it only creates certain rights for the shareholders (21 ITR 12) (Bom). Therefore, the transfer of shares of UPL and UEL owned by the assessee-company to NCPL is outside the scope of the provisions of clause-(a) of section…

DCIT, BANGALORE vs. DR. RAJAN PAI, BANGALORE

In the result, appeal of the Revenue stands dismissed

ITA 1290/BANG/2015[2012-13]Status: DisposedITAT Bangalore29 Apr 2016AY 2012-13

Bench: Shri. Abraham P. George & Shri. George George Ki.T.A No.1290/Bang/2015 (Assessment Year : 2012-13) Deputy Commissioner Of Income-Tax, Central Circle -2(2), Bengaluru .. Appellant V. Dr. Rajan Pai, Block No.1B, Jakkur Plantation Village, Yelahanka Main Road, Bengaluru .. Respondent Pan : Agbpp2795G Assessee By : Shri. Sajjan Kumar Tulsiyan, Advocate Revenue By : Shri. Sanjay Kumar, Cit -Iii Heard On : 12.04.2016 Pronounced On : 29.04.2016 O R D E R Per Abraham P. George:

For Appellant: Shri. Sajjan Kumar Tulsiyan, AdvocateFor Respondent: Shri. Sanjay Kumar, CIT -III
Section 115RSection 115R(2)Section 56Section 56(2)Section 56(2)(vii)

…n effect transpires is that a share gets split (in the same proportion for all the shareholders), as for example by a factor of two in case of a 1:1 bonus issue. Reference in this regard may be made to the decision in CIT vs. Dalmia Investment Co. Ltd. [1964] 52 ITR 567 (SC) as well as in Khoday Distilleries Ltd. (supra), wherein reference stands made to the former, also quoting there-from, besides inter alia to Hunsur Plywood Works Ltd. vs. CIT [1998] 229 ITR 112 (SC), where the same were referred to as ‘capitalization shares’. In other words, there is no receipt of any property by the shareholder, and what stan…

ADITYA BIRLA NUVO LTD ( FORMERLY KNOWN AS INDIAN RAYON AND INDUSTRIES LTD),MUMBAI vs. ADDL CIT RG 3(2), MUMBAI

ITA 3703/MUM/2011[2007-08]Status: DisposedITAT Mumbai24 Nov 2015AY 2007-08
For Appellant: Shri J.D. MistriFor Respondent: Shri E. Sankaran-CIT(DR)
Section 143(3)Section 254(1)Section 43B

…shares was capital in nature because the issue of bonus shares led to an increase in the company’s capital base. 20. The observations and conclusions are erroneous as they run contrary to the observation made by this court in Dalmia Investment Co. Ltd. [1964] 52 ITR 567. The capital base of the company prior to or after the issuance of bonus shares remains unchanged. 9 3703/11 -+1-Aditya Birla Nuvo 21. Issuance of bonus shares does not result in any inflow of fresh funds or increase in the capital employed, the capital employed remains the same. Issuance of bonus shares by capitalization of reserves is merely…

ADDL CIT 3(2), MUMBAI vs. ADITYA BIRLA NUVO LTD ( FORMERLY KNOWN AS INDIAN RAYON & INDUSTRIES LTD), MUMBAI

ITA 3634/MUM/2011[2007-08]Status: DisposedITAT Mumbai24 Nov 2015AY 2007-08
For Appellant: Shri J.D. MistriFor Respondent: Shri E. Sankaran-CIT(DR)
Section 143(3)Section 254(1)Section 43B

…shares was capital in nature because the issue of bonus shares led to an increase in the company’s capital base. 20. The observations and conclusions are erroneous as they run contrary to the observation made by this court in Dalmia Investment Co. Ltd. [1964] 52 ITR 567. The capital base of the company prior to or after the issuance of bonus shares remains unchanged. 9 3703/11 -+1-Aditya Birla Nuvo 21. Issuance of bonus shares does not result in any inflow of fresh funds or increase in the capital employed, the capital employed remains the same. Issuance of bonus shares by capitalization of reserves is merely…

M/S KHODAY DISTILLERIES LTD. vs. COMMISSIONER OF INCOME TAX

C.A. No.-006654-006654 - 2008Supreme Court14 Nov 2008
Section 2Section 4(1)Section 4(1)(a)

…eserve fund to the shareholders even though it had retained the entire amount with it in the share capital account. It must also be noted that while dealing with the question of valuation of bonus shares in the case of CIT v. Dalmia Investment Co. Ltd. (1964) 52 ITR 567 (SC), Hidayatullah, J. (as His Lordship then was), after referring to Blott’s case, preferred the view expressed by Viscounts Haldane, Finlay and Cave to the dissenting view taken by Lord Dunedin and Lord 1 Sumner. Dealing with the effect of issue of bonus shares, Hidayatullah, J. held that “the floating capital used in t…

COMMNR. OF INCOME TAX, MUMBAI vs. M/S. GENERAL INSURANCE CORPN.OF INDIA

C.A. No.-004422-004422 - 2001Supreme Court25 Sept 2006
For Respondent: M/s General Insurance Corporation
Section 143Section 260Section 81

…apital employed unchanged and therefore, does not result in conferring an enduring benefit to the company and the same has to be regarded as revenue expenditure. He has relied upon the judgment of this Court in CIT vs. Dalmia Investment Co. Ltd., (1964) 52 ITR 567 (SC), Bombay Burmah Trading Corporation Ltd. Vs. CIT, (1984) 145 ITR 793, Richardson Hindustan Limited Vs. CIT, (1988) 169 ITR 516 (Bombay) and the subsequent judgments of the same Court taking the same view and the judgment of the Calcutta High Court in Wood Craft Products Limited Vs. Commissioner of Income-Tax, (1993) 204 ITR 545. We m…