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2022 (2) TMI 529 - HC - Income TaxAddition u/s 68 - Tribunal upholding the order of CIT (Appeals) deleting the addition 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 - whether after the process of amalgamation the remission/cessation of trading liability can be taxed in the hands of the assessee company? - HELD THAT:- More appropriately the decision of the High Court of Delhi in Commissioner of Income Tax, Delhi-VI vs. Usha Stud Agricultural Farms Ltd. [2008 (3) TMI 91 - DELHI HIGH COURT] can be referred to as the facts in the said case would match with that of the facts in the case on hand. As in the case of the assessee before us in Usha Stud Agricultural Farms Ltd. the CIT(A) had recorded a finding of fact that the credit balance appearing in the accounts of the assessee does not pertain to the year under consideration and accordingly held that the assessing officer was not justified in making the addition under Section 68 of the Act. 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 the 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, cannot be taxed by applying Section 68 of the Act for the share capital and premium which these 14 amalgamating companies have shown in their respective books from financial year 2008-09 onwards. Furthermore, the Tribunal as well as the CIT(A) noted that the assessee company being a different corporate entity cannot be saddled with the share capital introduced by 14 different amalgamating companies in the financial year 2008-09. That apart, the Tribunal also considering the legal position namely, the decision in Saraswati Industrial Syndicate vs. Commissioner of Income Tax [1990 (9) TMI 1 - SUPREME COURT], in the case of Hukumchand Mohanlal [1971 (9) TMI 5 - SUPREME COURT] and Usha Stud Agricultural Farms Ltd. [2008 (3) TMI 91 - DELHI HIGH COURT] dismissed the appeal filed by the revenue. We find that there is no error committed by the Tribunal in affirming the decision of the CIT(A). - Decided against revenue.
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