Capital Reserve Created On Amalgamation Is Not Taxable As Perquisite U/S 28(iv) Of IT Act: Mumbai ITAT

The Mumbai ITAT ruled that a capital reserve created on amalgamation is not taxable as a perquisite under Section 28(iv) of the Income Tax Act. The case involved a company that had created a capital reserve during amalgamation, which the tax authorities sought to tax as a perquisite. The tribunal held that such reserves do not constitute a benefit or perquisite arising from business or profession and therefore are not taxable under Section 28(iv). This ruling provides clarity on the tax treatment of capital reserves created during amalgamations, ensuring that they are not subject to tax as perquisites.