- (1.) Heard the learned counsel on both sides. Delay condoned. Leave granted.
(2.) The question which arises for determination in this civil appeal filed by the Department is as follows: "Whether the sum of 75,00,000 received by the assessee as compensation from M/s Jenson and Nicholson Ltd. under consent decree dated 1-9-1998, in Suit No. 321-B of 1996 passed by the Calcutta High Court was at all taxable under Section 56 of the Income Tax Act, 1961.
(3.) The respondent made an application for allotment of fully convertible debentures of a company by the name "M/s Jenson and Nicholson Ltd." The said debentures were allotted to the respondent, which were later converted into shares. The shares were received by the respondent on 8-11-1996. Thereupon, the respondent became entitled for the right issue. On allotment of shares under the right issue, the respondent acquired about fourteen per cent of the paid-up capital of M/s Jenson and Nicholson Ltd., which was above the threshold limit prescribed by the Takeover Code enacted by the Securities and Exchange Board of India ("SEBI", for short). Consequently, the respondent became entitled to take over M/s Jenson and Nicholson Ltd. by virtue of allotment of the said shares. Under the said Takeover Code, as it then stood, the respondent acquired the right to make an open offer to the other shareholders of M/s Jenson and Nicholson Ltd. for acquiring at least twenty-five per cent of the paid-up share capital of that company. The respondent forwarded necessary intimation to various stock exchanges as also to M/s Jenson and Nicholson Ltd., as provided for in the Guidelines framed by SEBI.;