JUDGMENT : R. C. Mankad, J. The assessee is a public limited company engaged in the business of manufacture of pharmaceutical and medicinal products, fertilizers, etc. The assessment year under reference is 1970-71, the previous year being calendar year 1969. In the previous year relevant to the assessment year under reference, the assessee sold certain shares of Jyoti Ltd. and Alembic Glass Industries Ltd. While working out the capital gains arising out of the sale of the shares, the assessee claimed before the Income-tax Officer that it should be allowed deduction in respect of cost of acquisition on the basis of the original cost of the shares. The Income-tax Officer rejected this claim and worked out the cost of the shares by spreading out the cost of the original shares, on the original as well as bonus shares received by the assessee, following the decision of the Supreme Court in CIT v. Dalmia Investment Co. Ltd. 1964 (52) ITR 567 . He worked out the cost of shares of Jyoti Ltd, at Rs. 79.55 and the cost of shares of Alembic Glass Industries Ltd. at Rs. 55.65 and computed the long-term capital gains at Rs. 7,59,933. The Appellate Assistant Commissioner having upheld the view of the Income-tax Officer, the assessee carried the matter in appeal before the Income-tax Appellate Tribunal ("the Tribunal" for short). It was conceded before the Tribunal that the controversy regarding the working out of cost of original shares was fully covered by its decision in the assessee's appeal relating to the assessment year 1969-70, which was disposed of on November 22, 1976. Therefore, following the above decision, the Tribunal confirmed the decision of the Appellate Assistant Commissioner. It is in the background of the above facts that the Tribunal has, at the instance of the assessee, referred to us for our opinion the following question under section 256(1) of the Income-tax Act, 1961 ("the Act" for short): "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that, for the purpose of working out the capital gains arising out of the sale of original shares of Messrs. Jyoti Ltd., and original shares of Alembic Glass Industries Ltd., cost of shares to be deducted from the sale proceeds should be worked out spreading the cost at which the original shares were purchased and the bonus shares?" 2. Mr. Jyoti Ltd., and original shares of Alembic Glass Industries Ltd., cost of shares to be deducted from the sale proceeds should be worked out spreading the cost at which the original shares were purchased and the bonus shares?" 2. Mr. K. H. Kaji, learned counsel for the assessee, submitted that the Tribunal has erred in relying on the decision of the Supreme Court in the case of Dalmia Investment Co. Ltd. 1964 (52) ITR 567 . It was urged that the question before the Supreme Court in that case was with regard to the value of the bonus shares and not the cost of the original shares. It was submitted that income chargeable under the head "Capital gains" has to be computed as provided in section 48 of the Act. Under section 48 of the Act, the cost of acquisition of the capital asset has to be deducted while computing capital gains. The cost of original shares is the price which the assessee had paid when he acquired them, and, therefore, as provided in section 48 of the Act, this cost has to be deducted while computing the capital gains. It was urged that since, admittedly, the shares sold by the assessee were original shares, there is no question of spreading the cost of the original shares over the bonus shares to work out the cost of each share. The question of spreading over the cost of the original shares would arise only in a case where capital gains arising out of sale of bonus shares, is to be computed. In other words, while computing the capital gains arising out of sale of original shares, the cost of these shares at the time of their acquisition had to be taken into account and such cost is not required to be reduced by spreading the cost over the bonus shares also. 3. In the case of Dalmia Investment Co. Ltd. 1964 (52) ITR 567 , the assessee before the Supreme Court was holding ordinary shares in Rohtas Industries Ltd. In 1944, the assessee acquired 31,909 of these shares at the cost of Rs. 5,85,283 and was holding them in January, 1945. In that month, the Rohtas Industries Ltd. distributed bonus shares at the rate of one ordinary bonus share for each original share and so the assessee got 31,909 bonus shares. 5,85,283 and was holding them in January, 1945. In that month, the Rohtas Industries Ltd. distributed bonus shares at the rate of one ordinary bonus share for each original share and so the assessee got 31,909 bonus shares. Between that time and December 31, 1947, the assessee sold 14,650 of the original shares with the result that, on January 1, 1948, it held the following shares: (a) 17,259 original shares acquired in 1944, (b) 31,909 bonus shares issued in January, 1945, (c) 59,079 newly issued shares acquired in the year 1945 after the issue of the bonus shares, and (d) 2,500 further shares acquired in 1947. 4. The total holding of the assessee on January 1, 1948, thus came to 1,10,747 shares, which, in its books, had been valued at Rs. 15,57,902. In arriving at this figure, the assessee had valued the bonus shares at the face value of Rs. 10 each and the other shares at actual cost. On January 29, 1948, the assessee sold all these shares for a total cost of Rs. 15,50,458, that is, at Rs. 14 per share and, in its return for the assessment year 1949-50, claimed a loss of Rs. 7,444 on the sale. The Supreme Court, by a majority, observed that there were four possible methods for determining the cost of bonus shares. The first method is to take the cost as the equivalent of the face value of the bonus shares. That was the method followed by the assessee in making entries in its books. The second method adopted by the Department is that, as the shareholder did not pay anything in cash for the shares, the cost should be taken as nil. The third method is to take the cost of the original shares and to spread it over the original shares and bonus shares taken collectively. The fourth method is to find out the fall in the price of the original shares on the stock exchange and to attribute this to the bonus shares. The third method is to take the cost of the original shares and to spread it over the original shares and bonus shares taken collectively. The fourth method is to find out the fall in the price of the original shares on the stock exchange and to attribute this to the bonus shares. The Supreme Court, after considering the aforesaid four methods and in the light of the various decisions, ultimately came to the Conclusion that the shares have to be valued by spreading the cost of the old shares over the old shares and the new shares, namely, the bonus shares taken together, if they rank pari passu, and if they do not, the price may have to be adjusted either in proportion to the face value they bear (if there are no other circumstances to differentiate them) or on equitable considerations based on the market price before and after issue. Applying the above principle in the case before it, the Supreme Court worked out the cost of the original shares and the bonus shares by spreading the cost of the original shares over the original shares and the bonus shares. As a result of spreading over, the cost of the original shares stood reduced. It is on the basis of the cost of the original shares as well as the bonus shares, worked out on the above principle, that the Supreme Court worked out the profits earned by the assessee as a result of the sale of the original as well as bonus shares by the assessee. 5. It is not correct to say that the only question which arose before the Supreme Court in the case of Dalmia Investment Co. Ltd. 1964 (52) ITR 567 was the cost of the bonus shares. In order to work out the profits earned by the assessee in the case before it, the Supreme Court worked out the cost of the original as well as bonus shares by spreading the cost of the original shares over the original shares and the bonus shares. Ltd. 1964 (52) ITR 567 was the cost of the bonus shares. In order to work out the profits earned by the assessee in the case before it, the Supreme Court worked out the cost of the original as well as bonus shares by spreading the cost of the original shares over the original shares and the bonus shares. It must be remembered that the Supreme Court was not dealing with the sale merely of bonus shares ; it was dealing with sale of both original as well as bonus shares and, while working out the profits earned by the assessee, the cost of the original shares stood reduced as a result of the spreading over of the cost, as stated above. 6. In CIT v. Gold Co. Ltd. 1970 (78) ITR 16 (SC), the question which arose before the Supreme Court was with regard to the cost of the original shares where bonus shares are issued in respect of original shares. The Supreme Court pointed out that in CIT v. Gold Mohore Investment Co. Ltd. 1969 (74) ITR 62 , it has decided that the correct method to work out the cost of shares, where bonus shares are issued, is the one stated in the majority opinion in the case of Dalmia Investment Co. Ltd. 1964 (52) ITR 567 (SC). In other words, the Supreme Court held that the correct method of valuing the cost of the shares is to spread the price or cost of the original shares over the original and bonus shares and to calculate the profit or loss accordingly. It is thus clear that while working out the cost of the original shares also, the Supreme Court applied the method of spreading the cost of original shares over the original shares and the bonus shares. 7. It would thus appear that the question which is raised before us in this reference is concluded by the aforesaid decisions of the Supreme Court. 8. As pointed out above, the Tribunal, in confirmation of the decision of the Appellate Assistant Commissioner, had relied on its decision in the assessee's own case for the assessment year 1969-70. The questions arising out of the decision of the Tribunal for the assessment year 1969-70 were referred to this court for its opinion by Income-tax References Nos. 21 and 22 of 1978. The questions arising out of the decision of the Tribunal for the assessment year 1969-70 were referred to this court for its opinion by Income-tax References Nos. 21 and 22 of 1978. Both these references were disposed of by a common judgment dated June 15, 1981. One of the questions which were referred to this court for its opinion was whether the Tribunal was right in holding that, for the purpose of working out capital gains arising out of sale of original shares of Messrs. Jyoti Ltd. and Messrs. Alembic Glass Industries Ltd., the cost of the shares to be deducted from the sale proceeds should be worked out by spreading the cost at which the original shares were acquired over the original shares and the bonus shares. This question was answered in the affirmative and against the assessee following the decision of the Supreme Court in the case of Dalmia Investment Co. Ltd. 1964 (52) ITR 567 . This court held that the above question was directly covered by the said decision of the Supreme Court. It was, however, urged that this court had answered the question referred to it simply by following the decision of the Supreme Court in the case of Dalmia Investment Co. Ltd. 1964 (52) ITR 567 , without examining the question whether this decision had any application to the case of sale of original shares. In the light of what is discussed above, this grievance is without any substance. As observed above, the question before the Supreme Court in the case of Dalmia Investment Co. Ltd. 1964 (52) ITR 567 was not merely with regard to the cost of bonus shares. The Supreme Court had worked out the cost of original as well as bonus shares by spreading the cost of the original shares over the original shares and the bonus shares. It was after appreciating the principles laid down in the said decision of the Supreme Court that this court had answered the aforesaid question in the affirmative and against the assessee. However, in order not to leave any room for any grievance or doubt, we have again fully considered the said decision of the Supreme Court and we have no hesitation in reaffirming the view which was taken by this court in the assessee's own case for the assessment year 1969-70 (I.T.R. Nos. 21 and 22 of 1978). 9. However, in order not to leave any room for any grievance or doubt, we have again fully considered the said decision of the Supreme Court and we have no hesitation in reaffirming the view which was taken by this court in the assessee's own case for the assessment year 1969-70 (I.T.R. Nos. 21 and 22 of 1978). 9. In view of the clear pronouncement of the Supreme Court, we do not consider it necessary to refer to other decisions which were cited at the Bar. 10. In the result, we answer the question which is referred to us for our opinion in the affirmative and against the assessee. Reference answered accordingly with no order as to costs. 11. Mr. K. H. Kaji, learned counsel for the assessee, prays that this case may be certified to be a fit case for appeal to the Supreme Court under section 261 of the Act. Since, in our opinion, the question which has been referred to us is directly covered by the decision of the Supreme Court, referred to above, we do not consider this case to be a fit one for appeal to the Supreme Court. We, therefore, reject the prayer of Mr. Kaji.