COMMISSIONER OF INCOME-TAX, BOMBAY CITY , BOMBAY vs BAI SHIRINBAI K. KOOKA

The Supreme Court held that for computing profits from the sale of shares converted from investment to stock-in-trade, the cost price should be the market value as of April 1, 1945, rather than the actual purchase price. This decision aligns with the ordinary commercial principle of profit calculation, which considers the difference between the market value and sale proceeds. The court distinguished this case from Kikabhai Premchand v. Commissioner of Income-tax, emphasizing that actual profits from a trading activity must be assessed based on market realities.