COMMISSIONER OF INCOME TAX, BOMBAY vs RASIKLAL MANEKLAL (H.U.F.) & ORS.

The Supreme Court interpreted Sub-section (1) of Section 12B of the Indian Income Tax Act, 1922, determining that the receipt of shares from a surviving company post-amalgamation does not constitute an 'exchange' or 'relinquishment'. The Court held that the transaction did not involve a mutual transfer of property, as the original shares lost all value upon dissolution. Consequently, the assessment of capital gains under Section 12B was not applicable, affirming the High Court's decision in favor of the assessee.