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TMI Blog2015 (3) TMI 717X X X X Extracts X X X X X X X X Extracts X X X X ..... aid that it is out of normal transaction of the business. The present transaction is capital in nature arose on account of amalgamation of four companies. Hence, we have no hesitation to hold that the manner in which the Revenue wants to treat this amount is not in consonance with Section 28(iv) of the Income Tax Act. Tribunal was right in holding that the amounts transferred by the assessee company to the General Reserve 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 - Decided against revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... n appeal before the Commissioner of Income Tax (Appeals), who allowed the appeal, after calling for a remand report from the Assessing Officer, holding as follows: "5.5. I have considered the findings of the AO, the remand report and also the submissions made by the AR of the appellant and also the judicial pronouncements cited by the AR of the appellant on this issue. I have also perused the order of the High Court of Madras dated 10.3.2003 approving the scheme of amalgamation of the three transferor companies viz., M/s. I.Trigger Technologies (P) Ltd., M/s.Web Technologies (P) Ltd., Linus Solutions (P) Ltd. with transferee comapny viz., M/s.System Telecom and Data Services (P) Ltd. (the Stad Ltd.) and also the details of combined sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ef order, confirmed the order of the Commissioner of Income Tax (Appeals). 5. As against the said order of the Tribunal, the Revenue once again pursued the matter before this Court by filing the present appeal. 6. Heard Mr.T.Ravikumar, learned Standing Counsel appearing for the appellant and perused the materials placed before this Court. 7. It is seen that by order dated 10.3.2003, this Court approved the scheme of amalgamation of three transferor companies, viz., M/s. I.Trigger Technologies (P) Ltd., M/s.Web Technologies (P) Ltd., Linus Solutions (P) Ltd. with transferee company viz., M/s.System Telecom and Data Services (P) Ltd. (the Stad Ltd.), who is the assessee/respondent herein. In the scheme of amalgamation, the details of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quot;Profits and gains of business or profession. 28. The following income shall be chargeable to income-tax under the head Profits and gains of business or profession, (i)..... (ii).... (iii).... (iv) the value of any benefit or perquisite, whether convertible into money or not, arising from business or the exercise of a profession ;" 11. A plain reading of the above-said provision makes it clear that the amount reflected in the balance sheet of the assessee under the head 'reserves and surplus' cannot be treated as a benefit or perquisite arising from business or exercise of profession. The difference amount post amalgamation was the amalgamation reserve and it could not be said that it is out of normal transaction of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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