B&B Tax

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Showing posts from January, 2026

Case Law (SC) – Once the shares of the amalgamating company kept in stock-in-trade ceased to exist and were substituted by shares of the amalgamated company, there was a cession of the old trading stock and its replacement by a new commodity of ascertainable market value. On this footing, it is realisation of business profit and taxable under Section 28.

January 11, 2026

Jindal Equipment Leasing Consultancy Services Ltd. & Anr v. CIT & Ors. [2026 INSC 46] dated 09.01.2026. ISSUE BEFORE COURT ARE: - A. Whether an amalgamation – though, in company law, it operates as a statutory substitution of rights – nonetheless gives rise to taxable business profits under Section 28 of the I.T. Act . B. Whether the substitution of shares kept in stock-in-trade results in real commercial profits, having accrued or arisen in the course of business, so as to be chargeable as business income under Section 28. DECISION: - “ 27.2. In this context, the substitution of one trading asset by another, such as the receipt of shares in an amalgamated company in lieu of shares held as stock-in-trade in the amalgamating company, cannot be equated with a mere continuation of an investment. It represents a commercial realisation in kind, for the new shares are distinct assets with a definite and presently realisable market value. 27.3. If...

Case Law (SC) – When a coordinate Bench of a High Court has already determined a question of law, a subsequent Bench of equal strength is bound to follow that view; if it doubts its correctness, the only permissible course is to refer the matter to a larger Bench.

January 11, 2026

Ad ani Power Ltd. & Anr v. Union Of India & Ors. [2026 INSC 1] dated 05.01.2026. ISSUE BEFORE COURT ARE: - 38. From the rival submissions and the record before us, the following questions arise for consideration: I. Firstly, what, in law, did the Gujarat High Court decide in its judgment dated 15 July 2015, and what is the true scope of that decision? II. Secondly, whether, in the period subsequent to 15 September 2010 and prior to 16 February 2016, there was any material changes in the statutory position or factual footing that would justify a different result from that arrived at in 2015 judgment? III. Thirdly, whether the High Court, in its impugned judgment of 28 June 2019, was justified in holding that no relief could be granted to the appellant in the absence of a specific and fresh challenge to Notification Nos. 91/2010-Cus. and 26/2012-Cus? IV. Fourthly, whether, in view of the 2015 declaration of law and its affirmation, the High Court in 2019 was a...

Case Law (SC) – Non-compete fee only seeks to protect or enhance the profitability of the business, thereby facilitating the carrying on of the business more efficiently and profitably leaving the fixed assets untouched, the payment made to secure such advantage would be an allowable business expenditure, irrespective of the period over which the advantage may accrue to the payer (assessee) by incurring of such expenditure.

January 10, 2026

Sharp Business System v. CIT [2025 INSC 1481] dated 19.12.2025 ISSUE BEFORE COURT ARE: - (I). Whether non-compete fee paid by the assessee was a revenue expenditure or capital expenditure? (II). Whether non-compete fee was an intangible asset and hence entitled to depreciation? (III). Whether interest on borrowed fund is allowable expenditure where the assessee had advanced such amount to its sister concern as a measure of commercial expediency? DECISION: - “First and Second issue: “25. Having adverted to the relevant case laws, we may now examine the nature and character of non-compete fee; whether payment of non-compete fee is revenue expenditure or capital expenditure. Non-compete fee is paid by one party to another to restrain the latter from competing with the payer in the same line of business. It may be by way of a written agreement or by an oral understanding. The restriction may be limited to a specified territory or otherwise; similarly, it can be for a spec...