TaxTMI 
TaxTMI 
2016 (1) TMI 1505
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....") for Assessment Year 2003-04 vide his order dated 28.12.2010. 2. At the outset, Ld. Counsel for the assessee Shri D. S. Damle stated that he is not interested in prosecuting the Cross Objection under the instruction of the assessee. Ld. CIT, DR has not objected to the same. Hence, the Cross Objection of the assessee is dismissed as not pressed. 3. Coming to Revenue's appeal. The only issue in this appeal of revenue is against the order of CIT(A) deleting the addition made by AO on account of amalgamation reserve treating the same as income u/s. 28(iv) read with section 2(24)(vd) of the Act. For this, revenue has raised following ground no.1: "1. That on the facts and circumstances of the case, Ld. CIT(A0 was not justified in deleting ....
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....ssue the Hon'ble third member has given his finding that "the amount of Rs. 2899.68 lakhs transferred by the assessee to its General Reserve was not generated out of trading operations. The surplus in fact arose out of acquisition of capital assets. It was a transaction in the capital segment. In fact, there is no surplus. It was only an accounting notion. It was necessarily to be reflected in the accounts so as to tally the balance sheet. On amalgamation, shares can be allotted only on its face value. At the same time, the market value of the shares is very high. The assets are taken over by the assessee and the number of shares to be allotted to the amalgamated company was computed on the basis of the market value of the shares evalua....
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....ture of any benefit or perquisite. I find that the difference amount between the face value of shares and the premium of share to the tune of Rs. 14,10,00,000/- is notional amount entered into the books of accounts in order to get the balance sheet tallied. In this case also the amalgamation transaction and its deal has been approved by the Hon'ble Calcutta High Court. There is no complain against the method of valuation or the market value assigned. The A.O. has not given any adverse finding regarding the value of the shares of the assessee company or the value assigned to the assets taken over. Here in this case also the value of the assets has to be accounted at its net worth value as taken over by the assessee company. Therefore, th....
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....res to the shareholders of the amalgamating companies and this fact is clearly mentioned in the Notes on Accounts that the amalgamation of the three companies was accounted in the assessee's books under the 'Pulling' of an interest method as prescribed by Accounting Standard 14 issued by ICAI. According to him, the Notes state that all the assets and liabilities and reserves of the amalgamating companies were taken over and accounted for in the books of the assessee being the amalgamated companies at their respective book values. The consideration for taking over the assets and liabilities of the amalgamating companies was paid in the form of allotment of shares of the amalgamated company to the shareholders of the amalgamating companies. H....
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....double entry system of book keeping. The relevant finding is as under: "Learned counsel for the department urges that it should also be considered that the business of the assessee-company included amalgamation with other companies. It is, therefore, contended that the amounts appearing as surplus are revenue receipts received in the course of business by the assessee-company in these cases. I cannot accept this contention for the simple reason that in a case of amalgamation, the assets of the amalgamating company come to the amalgamated company. The amalgamated company, i. e., the assessees in these cases, do not have to pay anything to any one. They have only to replace the shareholding of the amalgamating company by their own shares. T....