Jindal Equipment Leasing & Ors. V. CIT, Delhi, CIVIL APPEAL NO. 152 OF 2026 [Arising Out Of S.L.P. (C) No. 2028 Of 2021], 2026 INSC 46; Dated 09th January, 2026

In this case, the Supreme Court held that shares received in an amalgamation can be taxable as business income under Section 28 if the original shares were held as stock-in-trade, clarifying that taxability does not depend on an actual sale or cash receipt.

The Court ruled that amalgamation results in extinguishment of old shares and receipt of new shares, which may amount to realisation of trading assets, and that the capital gains exemption under Section 47(vii) applies only to capital assets, not trading stock. Finding that the Tribunal erred in applying capital gains principles alone, the Court upheld the High Court’s remand directing the ITAT to determine afresh the true nature of the shareholding (capital asset vs. stock-in-trade), thereby reaffirming that realisation in kind can trigger business income taxation.