2022 (2) TMI 529

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.... in short) in IT(SS)A No.118/Kol/2017 for the assessment year 2012- 13.   The revenue has raised for the following substantial questions of law for consideration: "(a) Whether on the facts and in the circumstances of the case, the Learned Income Tax Appellate Tribunal was right in law in upholding the order of the Commissioner of Income Tax (Appeals) deleting the addition made under Section 69 of the Act on the ground that the assessee company is different juristic entity cannot be taxed by applying Section 68 of the Act for the share capital and premium which these 14 amalgamating companies have shown their respective books from Financial Year 2008-09 onwards ? (b) Whether the Learned Income Tax Appellate Tribunal....

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....rt. It would be beneficial to refer to paragraph 5 of the judgment which reads as follows: "Generally, where only one company is involved in change and the rights of the shareholders and creditors are varied, it amounts to reconstruction or reorganisation or scheme of arrangement. In amalgamation two or more companies are fused into one by merger or by taking over by another. Reconstruction or 'amalgamation' has no precise legal meaning. The amalgamation is a blending of two or more existing undertakings into one undertaking, the shareholders of each blending company become substantially the shareholders in the company which is to carry on the blended undertakings. There may be amalgamation either by the transfer of two or more und....

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....er was not justified in making the addition under Section 68 of the Act. Mr. S. N. Dutta vehemently contends that the substantial amount of funds are involved in the matter and the Tribunal proceeded to decide the matter only on technicalities. To test the correctness of the said submission we have not only gone through the order passed by the Tribunal but also the order passed by the CIT(A) dated 15th June, 2017. The CIT(A) as well as he Tribunal not only took note of the legal position but also the factual position. The Tribunal held that the legal effect after amalgamation of the 14 companies with the assessee company is that the amalgamating companies loses its identity and since the assessee company is different juristic entity, ....