2015 (3) TMI 717

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ve on amalgamation is not in the nature of any benefit or perquisite and thus not taxable under Section 28(iv) of the Income Tax Act, 1961?" 2. The brief facts of the case are as follows: The assessee is engaged in the business of software development and sale of developed software packages. During the financial year 2002-03, four companies, viz., M/s.I-Triger Technologies Ltd., M/s.Web-net Technologies Ltd., M/s.Linus and M/s.Himachal Futuristic Communications Ltd., had amalgamated with the assessee company and a sum of Rs. 2,16,88,220/- had been reflected as reserves and surplus in the balance sheet.  The assessee company filed its return of income for the assessment year 2003-04 on 01.12.2003.  Since the assessee did not ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....0/- and the difference was Rs. 2,16,88,220/-.  It was explained by the AR of the appellant that the difference of Rs. 2,16,88,220/- was the amalgamation reserve.  From the above facts and circumstances of the case, I find that the nature of the receipt ie., amalgamation reserve is not on account of any normal business transaction or revenue transactions.  The nature of the receipt is a capital receipt which arose on account of the amalgamation of the companies.  The ratio of the decision rendered by ITAT, Calcutta Bench, cited by the AR of the appellant in the case of ITO v. Shreyans Investments (P) Ltd. in IT Appeal No.1485(Kol)/2011 dated 6.3.2013 is fully applicable to the facts of the present case.  The capital ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....nd equity share capital of the company post amalgamation was Rs. 87,60,380/- and the difference was Rs. 2,16,88,220/-.  The assessee showed the said difference under the category "reserves and surplus" in the balance sheet.  8. The Department took a view that it is a profit and gains or profession, more particularly it is a value of benefit or perquisite arising from business or exercise of profession.  But the Commissioner of Income Tax (Appeals),  set aside the view of the Department, which the Tribunal has confirmed by a one line order.  Probably, that prompted the Revenue to pursue the matter before this Court forcing us to write more explicitly and detailed order on the interpretation of Section 28(iv), whic....