Happy Lohri
CA Raj Chawla
Quotes of the day:
1. Silence doesn't mean that person Quits . It simply means that one doesn't want to Argue with people who just don't want to Understand & to Avoid Friction in RELATIONSHIPS.
2. Small Steps will get you to the Top Faster. Being faithful, diligent and consistent with little steps is the secret to mounting great heights. Start Small, Think Big and Be Consistent.
NICAI Update:
1. The Supreme Court considered whether, on amalgamation, the allotment of shares of the amalgamated company in lieu of shares of the amalgamating company gives rise to taxable business income when the original shares were held as stock-in-trade.
2. The assessees (Jindal Group investment companies) claimed exemption under section 47(vii) treating the shares as capital assets, while the Assessing Officer held them to be stock-in-trade and taxed the difference as business income under section 28. The Tribunal had avoided deciding whether the shares were capital assets or stock-in-trade and held that no income arises unless there is a sale or transfer.
3. The High Court disagreed and remanded the matter to the Tribunal to first determine the nature of holding, observing that if shares were stock-in-trade, section 47(vii) would not apply and taxability would fall under section 28. 
4. Upholding the High Court’s approach, the Supreme Court held that section 28 is a wide charging provision and does not depend on the technical concept of “transfer” under section 2(47), which is relevant mainly for capital gains.
5. However, the Court clarified that mere statutory substitution of shares on amalgamation does not automatically amount to taxable business profit. What is required is commercial realisation of a real and presently realisable benefit—for example, where the old trading stock is replaced by freely tradable shares of ascertainable market value, capable of immediate monetisation. If such real income is not commercially realisable at the stage of amalgamation (e.g., due to restrictions or lack of market), tax would arise only when the substituted shares are actually sold.
6. Hence, the decisive issue is factual: whether the assessee obtained a real, immediately realisable business benefit on allotment. The matter was therefore rightly remanded to the Tribunal to determine whether the shares were held as stock-in-trade or capital assets and whether real income arose on amalgamation. 
7. Name of the case:
M/s Jindal Equipment Leasing Consultancy Services Ltd. v. Commissioner of Income Tax (and connected appeals), Supreme Court of India, Civil Appeal Nos. 152–155 of 2026 (arising out of SLPs of 2021).
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With best regards
CA (Dr) Raj Chawla
B.Com (Hons), FCA, FCS, FCMA, LLB
MIMA, DISA, MICA, Phd, ASA (Aust), CMP (USA)
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