Orient Trading Co. Ltd. v. CIT

224 ITR 371Supreme Court of India1997#7755 most cited

What is Orient Trading Co. Ltd. v. CIT authority for?

The exchange of shares of one company for shares of another company constitutes a realization of the shares of the first company, and the difference in value is chargeable income. Consequently, a loss on a similar exchange is also allowable.

14

judgments rely on this decision, according to BharatTax’s citation analysis of 366,314 Indian tax judgments — from 2020 to 2026.

Also referred to as

Orient Trading Co. Ltd. v. CIT · Section 45 · Section 2(47) · exchange of shares · realization of shares · capital gains · merger · company restructuring

Sections most often in play

Section 2(47)Section 45Section 14ASection 36(1)(iii)Section 143(2)Section 143(3)Section 153BSection 153C

Issues it is cited on

extinguishment of rightssection 269uarecord datesection 47section 49section 2(47)compulsory acquisitionsection 10(2)section 39transferee companysection 53atransfer of capital asset

Judgments citing Orient Trading Co. Ltd. v. CIT

M/S Jindal Equipment Leasing Consultancy Services Ltd vs. Commissioner of Income Tax

Appeals stand disposed of in the aforesaid terms

C.A. No.-000152-000152 - 2026Supreme Court09 Jan 2026

Bench: HON'BLE MR. JUSTICE R. MAHADEVAN

Section 143(3)Section 28Section 47

…THE PARTIES 4. Mr. Ajay Vohra, learned Senior Counsel for the appellants, primarily submitted that the impugned judgment of the High Court is liable to be set aside as it travels beyond the jurisdiction conferred under Section 260A of the I.T. 6 (1997) 224 ITR 371 (SC) : (1997) 3 SCC 340 7 Act. It was pointed out that the appeals before the High Court were admitted on a limited question, namely, whether the Tribunal was correct in holding that where the assessees get shares of the amalgamated company in lieu of shares of the amalgamating company, no transfer takes place. However, while disposing…

Assistant Commissioner of Income Tax, Circle-2, Kota vs. Chambal Fertilizers and Chemicals Ltd., Kota

56. As a result, as regards the issue of allowance/disallowance of

ITA 1099/JPR/2024[2016-17]Status: DisposedITAT Jaipur27 Aug 2025AY 2016-17
For Appellant: Shri P.J. Pardiwala, AdvFor Respondent: Shri Rajesh Ojha, CIT &
Section 14ASection 36(1)Section 36(1)(iii)

…pinion, extinguishment of right/ relinquishment of shares pursuant to merger of the CTL with CVL would be 'transfer of the investments held in CTL thereby attracting the provisions of section 45 of the Act. In the case of Orient Trading Co. Ltd. v. CIT [1997] 224 ITR 371 1 referred to by the appellant, the Hon'ble Supreme Court held that the exchange of shares of one company for shares of another company was realisation of shares of first company and the difference between the price of shares of the first company and the second company on the date of exchange was income chargeable. Hence by corollary, the loss on…

Assistant Commissioner of Income Tax, Circle-2, Kota vs. Chambal Fertilizers and Chemicals Ltd, Kota

56. As a result, as regards the issue of allowance/disallowance of

ITA 1098/JPR/2024[2015-16]Status: DisposedITAT Jaipur27 Aug 2025AY 2015-16
Section 14ASection 36(1)Section 36(1)(iii)

…pinion, extinguishment of right/ relinquishment of shares pursuant to merger of the CTL with CVL would be 'transfer of the investments held in CTL thereby attracting the provisions of section 45 of the Act. In the case of Orient Trading Co. Ltd. v. CIT [1997] 224 ITR 371 1 referred to by the appellant, the Hon'ble Supreme Court held that the exchange of shares of one company for shares of another company was realisation of shares of first company and the difference between the price of shares of the first company and the second company on the date of exchange was income chargeable. Hence by corollary, the loss on…

Assistant Commissioner of Income Tax, Circle-2, Kota vs. Chambal Fertilizers and Chemicals Ltd., Kota

ITA 1097/JPR/2024[2011-12]Status: DisposedITAT Jaipur27 Aug 2025AY 2011-12

Bench: SHRI GAGAN GOYAL (Accountant Member), SHRI NARINDER KUMAR (Judicial Member)

For Appellant: Shri P.J. Pardiwala, AdvFor Respondent: Shri Rajesh Ojha, CIT &
Section 14ASection 36(1)Section 36(1)(iii)

…pinion, extinguishment of right/ relinquishment of shares pursuant to merger of the CTL with CVL would be 'transfer of the investments held in CTL thereby attracting the provisions of section 45 of the Act. In the case of Orient Trading Co. Ltd. v. CIT [1997] 224 ITR 371 1 referred to by the appellant, the Hon'ble Supreme Court held that the exchange of shares of one company for shares of another company was realisation of shares of first company and the difference between the price of shares of the first company and the second company on the date of exchange was income chargeable. Hence by corollary, the loss on…

Assistant Commissioner of Income Tax, Circle-2, Kota vs. Chambal Fertilizers and Chemicals Ltd, Kota

ITA 1091/JPR/2024[2017-18]Status: DisposedITAT Jaipur27 Aug 2025AY 2017-18

Bench: SHRI GAGAN GOYAL (Accountant Member), SHRI NARINDER KUMAR (Judicial Member)

For Appellant: Shri P.J. Pardiwala, AdvFor Respondent: Shri Rajesh Ojha, CIT &
Section 14ASection 36(1)Section 36(1)(iii)

…pinion, extinguishment of right/ relinquishment of shares pursuant to merger of the CTL with CVL would be 'transfer of the investments held in CTL thereby attracting the provisions of section 45 of the Act. In the case of Orient Trading Co. Ltd. v. CIT [1997] 224 ITR 371 1 referred to by the appellant, the Hon'ble Supreme Court held that the exchange of shares of one company for shares of another company was realisation of shares of first company and the difference between the price of shares of the first company and the second company on the date of exchange was income chargeable. Hence by corollary, the loss on…

Assistant Commissioner of Income Tax, Circle-2, Kota vs. Chambal Fertilizers and Chemicals Ltd, Kota

ITA 1090/JPR/2024[2010-11]Status: DisposedITAT Jaipur27 Aug 2025AY 2010-11

Bench: SHRI GAGAN GOYAL (Accountant Member), SHRI NARINDER KUMAR (Judicial Member)

For Appellant: Shri P.J. Pardiwala, AdvFor Respondent: Shri Rajesh Ojha, CIT &
Section 14ASection 36(1)Section 36(1)(iii)

…pinion, extinguishment of right/ relinquishment of shares pursuant to merger of the CTL with CVL would be 'transfer of the investments held in CTL thereby attracting the provisions of section 45 of the Act. In the case of Orient Trading Co. Ltd. v. CIT [1997] 224 ITR 371 1 referred to by the appellant, the Hon'ble Supreme Court held that the exchange of shares of one company for shares of another company was realisation of shares of first company and the difference between the price of shares of the first company and the second company on the date of exchange was income chargeable. Hence by corollary, the loss on…

Nalpad Hotels and Convention Centre, Bangalore vs. The Deputy Commissioner of Incomer Tax, Central Circle-2(3), Banglaore

ITA 1298/BANG/2024[2017-18]Status: DisposedITAT Bangalore16 Aug 2024AY 2017-18

Bench: Shri Chandra Poojari & Shri Soundararajan K.Assessment Year: 2017-18

For Appellant: Sri H. Guruswamy, ITP &For Respondent: Shri Kiran D., D.R
Section 139(9)Section 143(2)Section 153CSection 250

…assessment order, it is urged that he Ld. CIT(A) has erred in holding a sum of Rs111,53,50,377/- as Business income for the A. Y 017-18 on the decision dated 22-01-1997 of the Honourable Supreme Court in the case of M/S. Oriental Trading co. Ltd. vs. CIT(A)- 224 ITR 371 without appreciating the fact that the said decision was distinguishable on facts and circumstances of the case of the appellant. 7. The Ld. CIT(A) has erred in holding a sum of Rs. 111,53,50,377/- as Business income merely on the basis of occupation certificate obtained in the Financial year 2016-17 relevant to the A.Y 201718 without appreciatin…

Nalapad Properties, Bangalore vs. The Deputy Commissioner of Incomer Tax, Central Circle-2(3), Bangalore

ITA 1297/BANG/2024[2017-18]Status: DisposedITAT Bangalore16 Aug 2024AY 2017-18
For Appellant: Sri H. Guruswamy, ITP &For Respondent: Shri Kiran D., D.R
Section 139(9)Section 143(2)Section 153CSection 250Section 45

…assessment order, it is urged that he Ld. CIT(A) has erred in holding a sum of Rs111,53,50,377/- as Business income for the A. Y 017-18 on the decision dated 22-01-1997 of the Honourable Supreme Court in the case of M/S. Oriental Trading co. Ltd. vs. CIT(A)- 224 ITR 371 without appreciating the fact that the said decision was distinguishable on facts and circumstances of the case of the appellant. 7. The Ld. CIT(A) has erred in holding a sum of Rs. 111,53,50,377/- as Business income merely on the basis of occupation certificate obtained in the Financial year 2016-17 relevant to the A.Y 201718 without appreciatin…

T.L.Sritharan, Chennai vs. ACIT Non Corporate Circle-14, Chennai

In the result, appeal filed by the assessee is dismissed

ITA 1596/CHNY/2019[2014-15]Status: DisposedITAT Chennai04 Jan 2023AY 2014-15

Bench: Shri V. Durga Rao & Shri G. Manjunathaआयकर अपील सं./Ita No.: 1596/Chny/2019 िनधा"रण वष" / Assessment Year: 2014-15 T.L. Sritharan, The Assistant Commissioner Of New No. 13, (Old No. 1), V. Income Tax, Swaminathan Street, Non-Corporate Circle -14, West Mambalam, Chennai – 600 034. Chennai – 600 033. [Pan: Aepps-6766-J] (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से/Appellant By : Shri. R. Vijayaraghavan, Advocate & Shri. Saroj Kumar Parida, Advocate ""यथ" क" ओर से/Respondent By : Shri. Ar.V. Sreenivasan, Addl. Cit सुनवाई क" तारीख/Date Of Hearing : 22.12.2022 घोषणा क" तारीख/Date Of Pronouncement : 04.01.2023 आदेश /O R D E R

For Appellant: Shri. R. Vijayaraghavan, Advocate &For Respondent: Shri. AR.V. Sreenivasan, Addl. CIT
Section 2(47)

…1. I have carefully considered the facts of the case and the submissions of the authorized representative. The decisions cited by the AR are distinguishable and the reliance place by the Assessing Officer in the case of Orient Trading Co. Ltd vs CIT (1997) in 224 ITR 371, (SC) in the assessment order is more relevant. The facts in that case are as below: The assessee is a company dealing in shares. It was holding 14500 shares of Asiatic Oxygen & Acetylene Company Limited (hereinafter referred to as `the first Company'), of the face value of Rs. 10/- each as its stock-in-trade. The said shares were valued by the a…

The Commissioner of Income Tax vs. M/S Nalwa Investment Ltd

Appeals are allowed

ITA/822/2005HC Delhi07 Aug 2020

Bench: HON'BLE MR. JUSTICE MANMOHAN,HON'BLE MR. JUSTICE SANJEEV NARULA

Section 260ASection 391Section 47

…n lieu of shareholding in the amalgamating company, constitutes a ‘transfer’. 7. Mr. Agarwal further contended that ITAT should have followed the decision of the Supreme Court in the case of Orient Trading Co. Ltd. v. Commissioner of Income-Tax, (1997) 224 ITR 371 (SC), since the factual situation in the said case is similar to the one in hand. He argued that since the shares in question were stock-in-trade of the assessees, exemption under Section 47(vii) is not available and thus the transaction is taxable. The order of the ITAT should be reversed and the order of the AO as confirmed by CIT(A) ought…

Commissioner of Income Tax Del vs. M/S Mansarovar Investments Ltd

Appeals are allowed

ITA/961/2005HC Delhi07 Aug 2020

Bench: HON'BLE MR. JUSTICE MANMOHAN,HON'BLE MR. JUSTICE SANJEEV NARULA

Section 260ASection 391Section 47

…n lieu of shareholding in the amalgamating company, constitutes a ‘transfer’. 7. Mr. Agarwal further contended that ITAT should have followed the decision of the Supreme Court in the case of Orient Trading Co. Ltd. v. Commissioner of Income-Tax, (1997) 224 ITR 371 (SC), since the factual situation in the said case is similar to the one in hand. He argued that since the shares in question were stock-in-trade of the assessees, exemption under Section 47(vii) is not available and thus the transaction is taxable. The order of the ITAT should be reversed and the order of the AO as confirmed by CIT(A) ought…

Commissioner of Income Tax Del vs. M/S Abhuinandan Investments Lt

Appeals are allowed

ITA - 853 / 2005HC Delhi07 Aug 2020
Section 260ASection 391Section 47

…n lieu of shareholding in the amalgamating company, constitutes a ‘transfer’. 7. Mr. Agarwal further contended that ITAT should have followed the decision of the Supreme Court in the case of Orient Trading Co. Ltd. v. Commissioner of Income-Tax, (1997) 224 ITR 371 (SC), since the factual situation in the said case is similar to the one in hand. He argued that since the shares in question were stock-in-trade of the assessees, exemption under Section 47(vii) is not available and thus the transaction is taxable. The order of the ITAT should be reversed and the order of the AO as confirmed by CIT(A) ought…

Commissioner of Income Tax Del vs. M/S M/S Jindal Equipment Leasi

Appeals are allowed

ITA - 935 / 2005HC Delhi07 Aug 2020
Section 260ASection 391Section 47

…n lieu of shareholding in the amalgamating company, constitutes a ‘transfer’. 7. Mr. Agarwal further contended that ITAT should have followed the decision of the Supreme Court in the case of Orient Trading Co. Ltd. v. Commissioner of Income-Tax, (1997) 224 ITR 371 (SC), since the factual situation in the said case is similar to the one in hand. He argued that since the shares in question were stock-in-trade of the assessees, exemption under Section 47(vii) is not available and thus the transaction is taxable. The order of the ITAT should be reversed and the order of the AO as confirmed by CIT(A) ought…

Commissioner of Income Tax Del vs. M/S Mansarovar Investments Ltd

Appeals are allowed

ITA - 961 / 2005HC Delhi07 Aug 2020
Section 260ASection 391Section 47

…n lieu of shareholding in the amalgamating company, constitutes a ‘transfer’. 7. Mr. Agarwal further contended that ITAT should have followed the decision of the Supreme Court in the case of Orient Trading Co. Ltd. v. Commissioner of Income-Tax, (1997) 224 ITR 371 (SC), since the factual situation in the said case is similar to the one in hand. He argued that since the shares in question were stock-in-trade of the assessees, exemption under Section 47(vii) is not available and thus the transaction is taxable. The order of the ITAT should be reversed and the order of the AO as confirmed by CIT(A) ought…