https://www.taxtmi.com/caselaws?id=191565 A scheme of amalgamation under the Companies Act will not be sanctioned where, in substance, it is a device to avoid tax and is contrary to public interest. The court held that sanction under section 391(2) is a real judicial discretion, not a mechanical exercise, and that the second proviso to section 394(1) requires scrutiny of whether the transferor-company's affairs and the proposed scheme offend public interest. The court may lift the corporate veil to identify the true purpose of the arrangement, examine who led the company and why it was formed, and refuse approval if the structure is a subterfuge for defeating fiscal obligations. en-us Mon, 31 Jan 1977 00:00:00 +0530 Fri, 07 Apr 2017 11:32:17 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=191565 A scheme of amalgamation under the Companies Act will not be sanctioned where, in substance, it is a device to avoid tax and is contrary to public interest. The court held that sanction under section 391(2) is a real judicial discretion, not a mechanical exercise, and that the second proviso to section 394(1) requires scrutiny of whether the transferor-company's affairs and the proposed scheme offend public interest. The court may lift the corporate veil to identify the true purpose of the arrangement, examine who led the company and why it was formed, and refuse approval if the structure is a subterfuge for defeating fiscal obligations. Case-Laws Companies Law Mon, 31 Jan 1977 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=191565