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TMI Blog2023 (12) TMI 1047X X X X Extracts X X X X X X X X Extracts X X X X ..... t firstly there should be a benefit and secondly the benefit should arise from business. In the present set of facts, there was neither any benefit nor any benefit arising from business to attract Section 28(iv) of the Act 1961. Under the circumstances, Section 28(iv) of the Act 1961 has no application at all, on the present set of facts. The findings recorded by the Tribunal are findings of fact based on consideration of relevant evidences on record. The findings recorded by the Tribunal do not suffer from any illegality or perversity. No merit in this appeal. The substantial question of law answered against the revenue and in favour of the assessee. - HON'BLE JUSTICE SURYA PRAKASH KESARWANI AND HON'BLE JUSTICE RAJARSHI BHAR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessing officer attempted to invoke this provision, despite the undisputed fact that in the audited accounts under clause 17A for the year ended 31.03.2023 (relating to assessment year 2003-04), the assessee furnished details of scheme of amalgamation approved by this Court dated 28.03.2023 pursuant to which three companies were amalgamated with the assessee during the relevant year and amalgamation reserve was created in the assessee s book for giving accounting effect thereto. 5. The assessing officer invoked Section 28(iv) of the Act 1961. The CIT (A) allowed the appeal of the assessee. Aggrieved with the order of the CIT (A, the revenue filed an appeal before the Income Tax Appellate Tribunal, C Bench, Kolkata being ITA No.75 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;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. He referred to the scheme of arrangement which was sanctioned by the Hon'ble Calcutta High Court that the share exchange ratio was also approved by Hon'ble Calcutta High cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness 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. This is the only form in which the amalgamated companies pay for the assets of the amalgamating companies. These shares may be issued at any convenient value. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In our view section 28(iv) of the Act therefore had no application in the assessee's case. The AO was not justified in assessing this amount as income of the assessee u/s 28(iv) of the Act because such reserve did not represent real income and secondly it did not constitute any benefit or perquisite arising from the business activity of the assessee. Hence we confirm the order of CIT(A) and this issue of revenue's appeal is dismissed. 7. There is no dispute on facts noted by the Tribunal in its order reproduced above. To invoke Section 28(iv) of the Act 1961, the necessary requirement is that firstly there should be a benefit and secondly the benefit should arise from business. In the present set of facts, there was neither a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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