Kumararatne vs. Commissioner General of Inland Revenue – sllr 2021 volume 2 page 171

In the case between R.L. Kumararatne (and others as Continuing Directors of Forbes & Walker Limited) and the Commissioner General of Inland Revenue, the court addressed whether the exchange of shares and warrants between Forbes & Walker Limited and The Ondaatje Corporation constituted an amalgamation/merger or a change of ownership (i.e., a sale of shares) under the Inland Revenue Act, and whether capital gains from this transaction were subject to tax. It was held that the transaction did not constitute an amalgamation or merger, but rather a sale and change of ownership, giving rise to taxable capital gains in accordance with sections 7(1)(a) and 7(2)(a) of the Act. The determination of share value and capital gain assessment by the Board of Review was upheld. This decision reaffirmed th