Receipt of amalgamated company’s shares are business profits: SC

The Supreme Court held that the receipt of shares of amalgamated company in substitution of stock-in-trade can give rise to taxable business profits under Section 28 of Income Tax Act, 1961. It said that once shares held as stock-in-trade in amalgamating company ceases to exist and are replaced by shares of amalgamated company of higher value, a business profit arises.