(CIT v. STADS Ltd.

373 ITR 313High Court2015#9733 most cited

What is (CIT v. STADS Ltd. authority for?

Reserves created under a scheme of amalgamation are capital in nature and do not arise from normal business activity, therefore cannot be taxed as business income. Amounts reflected in 'reserves and surplus' cannot be treated as a benefit or perquisite arising from business.

11

judgments rely on this decision, according to BharatTax’s citation analysis of 366,314 Indian tax judgments — from 2017 to 2024.

Also referred to as

CIT v. STADS Ltd. · amalgamation reserve · capital receipt · business income · reserves and surplus · scheme of amalgamation · section 28(iv) · section 56(2)(x)

Also reported as

61 Taxmann.com 33

Sections most often in play

Section 28(iv)Section 56(2)(x)Section 14ASection 194HSection 2(19AA)Section 35ABBSection 35DDSection 36(1)(iii)

Issues it is cited on

section 2(19aa)section 56(2)(viia)section 28(iv)section 39section 47transferor companyresulting companyscheme of arrangementtransferee companysection 56(2)(x)demergervaluation of shares

Judgments citing (CIT v. STADS Ltd.

Deputy Commissioner of Income Tax-14(2)(1), Mumbai vs. Idea Cellular Limited, Mumbai

In the result, appeal of the assessee is partly allowed and appeal of the Revenue is allowed for statistical purposes

ITA 4513/MUM/2017[2010-11]Status: DisposedITAT Mumbai14 Oct 2024AY 2010-11

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI GAGAN GOYAL (Accountant Member)

Section 143(3)Section 14ASection 194Section 194HSection 28Section 35DSection 36(1)(iii)Section 391Section 394Section 40

…placed reliance on the following judgments:-  CIT vs. Mahindra and Mahindra Ltd [2003] 261 ITR 501 (Bom HC) as affirmed by the Supreme Court in 93 taxmann.com 32 (SC)  CIT vs. Xylon Holdings Pvt. Ltd. (26 Taxmann.com 333) (Bom)  CIT vs. STADS Ltd. (2015) (373 ITR 313/61 taxmann.com 33) (Madras)  ITO vs. Shreyans Investment (P) Ltd. (31 Taxmann.com 11) (Kol-Trib) • ITO vs. M/s. Richvik Enterprises Private Limited (ITA no. 389/KOL/2012 order dated 24/06/2013) • ITO vs. M/s. Kyal Developers Pvt. Ltd. (ITA No. 627/Kol/2012)  Aamby Valley Ltd. vs. ACIT [2019] 102 taxmann.com 385 (Delhi - Trib.)  Sundaram Financ…

Idea Cellular Limited, Mumbai vs. Deputy Commissioner of Income Tax-3(2), Mumbai

In the result, appeal of the assessee is partly allowed and appeal of the Revenue is allowed for statistical purposes

ITA 4318/MUM/2017[2010-11]Status: DisposedITAT Mumbai14 Oct 2024AY 2010-11

Bench: IN THE INCOME TAX APPELLATE TRIBUNAL, ‘I’ BENCH MUMBAI BEFORE: SHRI AMIT SHUKLA (Judicial Member), SHRI GAGAN GOYAL (Accountant Member)

Section 143(3)Section 14ASection 194Section 194HSection 28Section 35DSection 36(1)(iii)Section 391Section 394Section 40

…placed reliance on the following judgments:-  CIT vs. Mahindra and Mahindra Ltd [2003] 261 ITR 501 (Bom HC) as affirmed by the Supreme Court in 93 taxmann.com 32 (SC)  CIT vs. Xylon Holdings Pvt. Ltd. (26 Taxmann.com 333) (Bom)  CIT vs. STADS Ltd. (2015) (373 ITR 313/61 taxmann.com 33) (Madras)  ITO vs. Shreyans Investment (P) Ltd. (31 Taxmann.com 11) (Kol-Trib) • ITO vs. M/s. Richvik Enterprises Private Limited (ITA no. 389/KOL/2012 order dated 24/06/2013) • ITO vs. M/s. Kyal Developers Pvt. Ltd. (ITA No. 627/Kol/2012)  Aamby Valley Ltd. vs. ACIT [2019] 102 taxmann.com 385 (Delhi - Trib.)  Sundaram Financ…

Dy. Commissioner of Income Tax, Central Circle-3(4), Mumbai vs. Samagra Wealthmax Private Limited, Mumbai

In the result, appeal of the learned AO is dismissed

ITA 2165/MUM/2023[2018-2019]Status: DisposedITAT Mumbai08 Oct 2024AY 2018-2019

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm Dy. Commissioner Of Samagra Wealthmax Income Tax, Private Limited, Central Circle-3(4) 5Th Floor, Sunteck Centre Room No. 1915, 19Th 37-40 Vs. Floor, Subhash Road, Air India Building, Vile Parle East, Nariman Point, Mumbai-400 057 Mumbai-400021 (Appellant) (Respondent) Pan No. Aaqcs5451E

For Appellant: Shri Rakesh Joshi &For Respondent: Shri Dr. Kishor Dhule – CIT
Section 19Section 41(1)

…f trade. Thus, the reserve created on account of amalgamation is capital in nature and cannot be said to be created on account of regular business activity. Similar view has been taken by the Hon'ble Madras High Court, in the case of CIT vs Stads Ltd., (2015) 373 ITR 313 (Mad.) in which in para 11 was held as Under: "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 th…

Dy. Commissioner of Income Tax, Central Circle-3(3), Mumbai vs. M/S. Welspun Steel Ltd, Mumbai

ITA 2169/MUM/2023[2017-2018]Status: DisposedITAT Mumbai29 Feb 2024AY 2017-2018
For Appellant: Shri Madhur Agrawal/Shri Mani
Section 132Section 139(1)Section 143(2)Section 153ASection 19Section 250

…f trade. Thus; the reserve created on account of amalgamation is capital in nature and cannot be said to be created on account of regular business activity; Similar view has been taken by the Hon'ble Madras High Court in the case of CIT vs Stads. Ltd., (2015) 373 ITR 313 (Mad.) in which in para 11 it was held as under: - "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…

Dy CIT CC-1(4), Mumbai vs. M/S Grasim Industries Ltd., Mumbai

ITA 41/MUM/2021[2018-19]Status: DisposedITAT Mumbai30 Nov 2022AY 2018-19

Bench: Shri Prashant Maharishi, Am & Shri Pavan Kumar Gadale, Jm

For Appellant: Shri. J.D Mistry, Sr. AdvFor Respondent: Shri Anil Singh
Section 115OSection 115QSection 2

…bmitted earlier, amalgamation reserve, by definition is a capital reserve which can never be distributed as dividend under the provisions of the Companies Act. Capital reserve arising pursuant to a scheme is not an accumulated profit (CIT Vs STADS Ltd (2015) (373 ITR 313/61 taxmann.com 33)(Mad) (Para 11, Pg. 566, Pg. 564-567 of Legal Paper Book, Vol. II) and ITO VsShreyans ITA Nos. 1935/MUM/2020 & 41/MUM/2021 Grasim Industries Ltd. 2018-19 Investments (P) Ltd (2013) (141 ITD 672)(T) (Kol) (Para 8, Pg. 573, Pg. 568-575 of Legal Paper Book, Vol. II). Further on an imaginary situation, deeming provisions cannot be…

Grasim Industries Ltd., Mumbai vs. Dy CIT, Central Circle-1(4), Mumbai

ITA 1935/MUM/2020[2018-19]Status: DisposedITAT Mumbai30 Nov 2022AY 2018-19

Bench: Shri Prashant Maharishi, Am & Shri Pavan Kumar Gadale, Jm

For Appellant: Shri. J.D Mistry, Sr. AdvFor Respondent: Shri Anil Singh
Section 115OSection 115QSection 2

…bmitted earlier, amalgamation reserve, by definition is a capital reserve which can never be distributed as dividend under the provisions of the Companies Act. Capital reserve arising pursuant to a scheme is not an accumulated profit (CIT Vs STADS Ltd (2015) (373 ITR 313/61 taxmann.com 33)(Mad) (Para 11, Pg. 566, Pg. 564-567 of Legal Paper Book, Vol. II) and ITO VsShreyans ITA Nos. 1935/MUM/2020 & 41/MUM/2021 Grasim Industries Ltd. 2018-19 Investments (P) Ltd (2013) (141 ITD 672)(T) (Kol) (Para 8, Pg. 573, Pg. 568-575 of Legal Paper Book, Vol. II). Further on an imaginary situation, deeming provisions cannot be…

25Fps Media Pvt. Ltd., Mumbai vs. ITO, Range -6(3)(1), Mumbai

In the result, the appeal filed by the assessee is hereby allowed and the appeal filed by the revenue is hereby dismissed

ITA 3085/MUM/2018[2012-13]Status: DisposedITAT Mumbai02 Mar 2022AY 2012-13

Bench: Shri Amarjit Singh, Jm & Shri Amarjit Singh, Am आयकर अपील सं/ I.T.A. No. 2798/Mum/2018 (निर्धारण वर्ा / Assessment Year:2012-13) Ito, Range-6(3)(1) बिधम/ 25Fps Media Pvt. Ltd. Room No.524, 5Th Floor, 18Th Floor, Marathon Futurex, Vs. Aayakar Bhavan, Mumbai- N. M. Joshi Marg, Lower 400020. Parel, Mumbai-400013. & आयकर अपील सं/ I.T.A. No. 3085/Mum/2018 (निर्धारण वर्ा / Assessment Year: 2012-13) बिधम/ 25Fps Media Pvt. Ltd. Ito, Range-6(3)(1) 18Th Floor, Marathon Futurex, Room No.524, 5Th Floor, Vs. N. M. Joshi Marg, Lower Aayakar Bhavan, Mumbai- Parel, Mumbai-400013. 400020. स्थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aaacz2076J (अपीलाथी /Appellant) .. (प्रत्यथी / Respondent) Assessee By: Shri Percy Pardiwala & Madhur Aggarwal Revenue By: Shri Achal Sharma (Dr) सुनवाई की तारीख / Date Of Hearing: 27/01/2022 घोषणा की तारीख /Date Of Pronouncement: 02/03/2022 आदेश / O R D E R Per Amarjit Singh (Jm): The Assessee As Well As Revenue Have Filed The Above Mentioned Appeals Against The Order Dated 28.02.2018 Passed By The Commissioner Of Income Tax (Appeals) -12, Mumbai [Hereinafter Referred To As The “Cit(A)”] Relevant To The A.Y. 2012-13. Ita. No.2798/Mum/2018 2. The Revenue Has Filed The Present Appeal Against The Order Dated 28.02.2018 Passed By The Commissioner Of Income Tax (Appeals) -12, Mumbai Relevant To The A.Y.2012-13. 3085/M/2018 A.Y. 2012-13 3. The Revenue Has Raised The Following Grounds: -

For Appellant: Shri Percy Pardiwala & MadhurFor Respondent: Shri Achal Sharma (DR)
Section 143(3)Section 14ASection 37Section 56(1)

…e services obtained by them from the assessee. While rendering this decision, the Hon'ble Tribunal placed reliance the decision of the Hon'ble Mumbai in the case of Hellos Food Improvers (P) ltd" Vs CIT (Supra). 223. Further, in the case of CIT Vs. Stads Ltd 373 ITR 313, the Hon'ble Madras High Court held that the benefit or perquisite should arise out of normal transaction of the business for the same to be taxed as business income u/s.28(iv) of the Act. The relevant part of the decision of the Hon'ble High Court is reproduced as under: Since the issue revolves around Section 28(iv) of the Income Tax Act, it i…

ITO 6(3)(1), Mumbai vs. 25 Fps Media Pvt. Ltd., Mumbai

In the result, the appeal filed by the assessee is hereby allowed and the appeal filed by the revenue is hereby dismissed

ITA 2798/MUM/2018[2012-13]Status: DisposedITAT Mumbai02 Mar 2022AY 2012-13

Bench: Shri Amarjit Singh, Jm & Shri Amarjit Singh, Am आयकर अपील सं/ I.T.A. No. 2798/Mum/2018 (निर्धारण वर्ा / Assessment Year:2012-13) Ito, Range-6(3)(1) बिधम/ 25Fps Media Pvt. Ltd. Room No.524, 5Th Floor, 18Th Floor, Marathon Futurex, Vs. Aayakar Bhavan, Mumbai- N. M. Joshi Marg, Lower 400020. Parel, Mumbai-400013. & आयकर अपील सं/ I.T.A. No. 3085/Mum/2018 (निर्धारण वर्ा / Assessment Year: 2012-13) बिधम/ 25Fps Media Pvt. Ltd. Ito, Range-6(3)(1) 18Th Floor, Marathon Futurex, Room No.524, 5Th Floor, Vs. N. M. Joshi Marg, Lower Aayakar Bhavan, Mumbai- Parel, Mumbai-400013. 400020. स्थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aaacz2076J (अपीलाथी /Appellant) .. (प्रत्यथी / Respondent) Assessee By: Shri Percy Pardiwala & Madhur Aggarwal Revenue By: Shri Achal Sharma (Dr) सुनवाई की तारीख / Date Of Hearing: 27/01/2022 घोषणा की तारीख /Date Of Pronouncement: 02/03/2022 आदेश / O R D E R Per Amarjit Singh (Jm): The Assessee As Well As Revenue Have Filed The Above Mentioned Appeals Against The Order Dated 28.02.2018 Passed By The Commissioner Of Income Tax (Appeals) -12, Mumbai [Hereinafter Referred To As The “Cit(A)”] Relevant To The A.Y. 2012-13. Ita. No.2798/Mum/2018 2. The Revenue Has Filed The Present Appeal Against The Order Dated 28.02.2018 Passed By The Commissioner Of Income Tax (Appeals) -12, Mumbai Relevant To The A.Y.2012-13. 3085/M/2018 A.Y. 2012-13 3. The Revenue Has Raised The Following Grounds: -

For Appellant: Shri Percy Pardiwala & MadhurFor Respondent: Shri Achal Sharma (DR)
Section 143(3)Section 14ASection 37Section 56(1)

…e services obtained by them from the assessee. While rendering this decision, the Hon'ble Tribunal placed reliance the decision of the Hon'ble Mumbai in the case of Hellos Food Improvers (P) ltd" Vs CIT (Supra). 223. Further, in the case of CIT Vs. Stads Ltd 373 ITR 313, the Hon'ble Madras High Court held that the benefit or perquisite should arise out of normal transaction of the business for the same to be taxed as business income u/s.28(iv) of the Act. The relevant part of the decision of the Hon'ble High Court is reproduced as under: Since the issue revolves around Section 28(iv) of the Income Tax Act, it i…

Commissioner of Income Tax, Central -I, Kolkata vs. Viper Estates & Investment (P) Ltd

In the result, appeal filed by the revenue is dismissed and the

ITA/67/2012HC Calcutta18 Jan 2022

Bench: : The Hon’Ble Justice T.S.Sivagnanam A N D The Hon’Ble Justice Hiranmay Bhattacharyya Dated : January 18, 2022. [Via Video Conference] Appearance : Mr. P.K. Bhowmick, Advocate …For Appellant Mr. Abhratosh Majumder, Advocate Mr. Avra Mazumder, Advocate …For Respondent The Court :- This Appeal By The Revenue Under Section 260A Of The Income Tax Act, 1961 (The Act) Is Directed Against The Order Dated 29Th December, 2010 Passed By The Income Tax Appellate Tribunal “B” Bench, Kolkata In Ita No. 890/Kol/2010 For The Assessment Year 2005-06. The Appeal Was Admitted On 15Th June, 2012 To Decide The Following Substantial Question Of Law:-

Section 260ASection 263Section 28

…the business or profession and the benefit, which is received has to be in some other form other than in the shape of money. 21. An identical issue was considered by the hon’ble Division Bench of this court in the case of CIT v. Stads Ltd. reported in [2015] 373 ITR 313 (Mad) wherein it was held that the provisions of section 28(iv) of the Act make it clear that the amount reflected in the balance-sheet of the assessee under the head “Reserves and surplus” could not be treated as a benefit or perquisite arising from business or exercise of profession, that the 4 difference amount post amalgamation was the amal…

Sundaram Finance Limited, Chennai vs. Addl. CIT, Chennai

In the result, the appeal of the assessee is allowed and the appeal of

ITA 71/CHNY/2015[2003-04]Status: DisposedITAT Chennai31 Mar 2017AY 2003-04

Bench: Shri N.R.S. Ganesan & Shri D.S.Sunder Singhआयकर अपील सं./Ita No.71/Mds/2015 "नधा"रण वष" /Assessment Year: 2003-04

For Respondent: Mr.B.Koteswara Rao, CIT
Section 28

…o business transaction in the amalgamation. Hence, Sec.28(iv) has no application in the assessee’s case. The assessee relied on the decision of the Hon’ble jurisdictional High Court in the case of CIT ITA Nos.71 & 284/Mds/2015 :- 7 -: v. Stads Ltd. (2015) 373 ITR 313 (Mad) dated 11.03.2015. The Hon’ble jurisdictional High Court in the case law cited (supra) held as under: 9. The short point that arises for consideration in this appeal is whether the amalgamation reserve consequent to the merger of four companies would fall within the ambit of profits and gains of business or profession, more particularly un…

ACIT, Chennai vs. Sundaram Finance Limited, Chennai

In the result, the appeal of the assessee is allowed and the appeal of

ITA 284/CHNY/2015[2003-04]Status: DisposedITAT Chennai31 Mar 2017AY 2003-04

Bench: Shri N.R.S. Ganesan & Shri D.S.Sunder Singhआयकर अपील सं./Ita No.71/Mds/2015 "नधा"रण वष" /Assessment Year: 2003-04

For Respondent: Mr.B.Koteswara Rao, CIT
Section 28

…o business transaction in the amalgamation. Hence, Sec.28(iv) has no application in the assessee’s case. The assessee relied on the decision of the Hon’ble jurisdictional High Court in the case of CIT ITA Nos.71 & 284/Mds/2015 :- 7 -: v. Stads Ltd. (2015) 373 ITR 313 (Mad) dated 11.03.2015. The Hon’ble jurisdictional High Court in the case law cited (supra) held as under: 9. The short point that arises for consideration in this appeal is whether the amalgamation reserve consequent to the merger of four companies would fall within the ambit of profits and gains of business or profession, more particularly un…

(CIT v. STADS Ltd. (373 ITR 313) — Cited in 11 Judgments | BharatTax