TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Join Channel
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: Whether the composite scheme of arrangement involving purchase of shares, demerger of the hotel business, and consequential reduction and reconstruction of share capital should be sanctioned, and whether the Regional Director's objection to the proposed accounting treatment in the resulting company required modification of the scheme.
Analysis: The scheme was supported by the shareholders and creditors, no objections were received after advertisement, and the court found the arrangement to be in the interests of the companies and their members. The only substantive objection raised was that the capital profit on demerger was proposed to be carried to general reserve. The court held that Accounting Standard-14 applies to amalgamation and not to a demerger of the present kind. It also noted that the company had offered, without prejudice, to treat any difference as share premium, but no alteration of the scheme was necessary. The court relied on the principle that a scheme approved by the affected stakeholders and found to be fair, reasonable, and lawful should not be disturbed absent a valid legal objection.
Conclusion: The objection was overruled and the scheme was sanctioned in favour of the petitioner-companies.
TaxTMI 
