THE COMMISSIONER OF INCOME-TAX, CALCUTTA vs GILLANDERS ARBUTHNOT & CO.Vice Versa

The Supreme Court ruled that the notice issued under Section 34 of the Income-tax Act, 1922 was valid as the assessee firm failed to disclose all material facts regarding the sale of shares. The Court held that the transaction was a 'sale' under Section 12B, not a mere readjustment or exchange, and that capital gains should be computed based on the sale price of Rs. 75 lakhs. The assessment was upheld, affirming the High Court's decision regarding the capital gains of Rs. 27,4,772.