Assessee, a public limited company, had amalgamated three private limited companies with itself which were essentially owned by relatives of promoters of assessee. Assessing Officer held that excess value transferred to beneficiary, related parties should be added to returned income of assessee on a protective basis as per section 56(2)(vii)(c) and made addition as protective basis. On appeal the CIT(A) deleted the addition. On appeal the Tribunal held that new shares allotted by amalgamated company did not give rise to a transfer of shares, and hence, also section 56(2)(vii)(c) had no application. Transfer of shares in a scheme of amalgamation was not considered as ‘transfer’ under section 47(vii) and accordingly, if it was not transferred, then application of section 56(2) was not applicable. Further, there was no anti-abuse of provision and new share was allotted as per amalgamation scheme under supervision of High Court after hearing of all stakeholders including Government. Scheme of amalgamation under which an exchange ratio of shares was approved by High Court and it was conclusive, question of skewed swap ratio or issuing shares at discounted rate did not arise. Order of CIT(A) deleting the addition is affirmed. (AY. 2014-15)