Negative goodwill arising on amalgamation credited to General reserve not taxable

The Chennai Tribunal in the case of Quintegra Solutions Pvt. Ltd., had considered the applicability of Section 28(iv) of the Act in the case of amalgamation. In that case the CIT(A) held that differential amount between share issued and net assets taken over, being balancing figure, did not represent income assessable under Section 28(iv) of the Act. The view of CIT(A) had been upheld by the Tribunal. The decision of Aries Advertising Co. Pvt Ltd., relied on by the Judicial Member, involved transfer of trading receipts. In case of amalgamation, there is inherent possibility of the taxpayer gai...