Tax alert: Capital reserve generated on amalgamation of indirect WOS, not taxable has been saved
Article
Tax alert: Capital reserve generated on amalgamation of indirect WOS, not taxable
7 January 2025
The Mumbai Bench of the Income-tax Appellate Tribunal has held that, based on facts, the merger of an indirect wholly-owned subsidiary into the taxpayer qualifies as an ‘amalgamation’ under section 2(1B) of the Income-tax Act, 1961 (ITA). Consequently, all exemptions provided in the ITA are available to the merger. Further, capital reserve (recorded on amalgamation) cannot be treated as income under section 28(iv) of the ITA.
