TaxTMI 
TaxTMI 
2010 (1) TMI 753
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.... scheme sanctioned by this Court. 3. Company Appln. No. 332 of 2009 is filed to direct the respondent to implement cl. 7.2 of the scheme sanctioned by this Court vide order dt. 12th Oct., 2004/8th Nov., 2004 in Company Petn. No. 171 of 2004 and dt. 29th Nov., 2007 in Company Appln. No. 2979 of 2007 which is final and conclusive w.e.f. 1st Jan., 2004 as per cl. 1.2 of the scheme for effectively implementing the sanctioned scheme and accept the revised returns for the asst. yr. 2005-06. 4. Company Appln. No. 333 of 2009 is to grant injunction restraining the respondent from taking any further action against the applicant insofar as the asst. yrs. 2004-05 and 2005-06 are concerned pending disposal of the application for implementation of cl. 7.2 and cl. 1.2 of the scheme sanctioned. 5. The cause for filing of the above applications had arisen on account of the respondent failing to take note of the fact that the revised returns filed by the assessee/the petitioner herein, while considering the reassessment for the asst. yr. 2004-05. Learned counsel appearing for the petitioner pointed out that when the revised returns had been filed immediately upon the sanctio....
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....., 2007 that the scheme was to come into existence on 1st Jan., 2004. A perusal of the documents filed before this Court shows that originally a composite scheme of amalgamation, arrangement and compromise was presented before this Court in Company Petn. Nos. 167 to 171 of 2004. By virtue of this scheme, the Animation and Num TV Divisions of Pentamedia Graphics Ltd. were proposed to be demerged and vested in Mayajaal Entertainment Ltd. The remaining three transferor companies viz., Media Dreams Ltd., Kris Srikkanth Sports Entertainment Ltd. and Intelivision Ltd. were sought to be merged with Mayajaal Entertainment Ltd. By orders dt. 12th Oct., 2004 and 8th Nov., 2004, this Court granted the scheme w.e.f. 1st Jan., 2004 subject to the petitioners therein complying with the various conditions. The effective date for the scheme enforceability was fixed at 1st Jan., 2004. The petitioners approached the Bombay Stock Exchange for listing of the equity share of Mayajaal Entertainment Ltd. In Company Appln. Nos. 1077 to 1081 of 2006, the petitioners approached this Court for a direction to the Bombay Stock Exchange for listing the equity shares of Mayajaal. By order dt. 30th Oct., 2006, th....
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....r the High Court of judicature at Madras modifies the appointed date to such other date, then the same shall be the appointed date.' 11. Going by the order of this Court sanctioning the original scheme under order dt. 12th Oct., 2004 and 8th Nov., 2004 and the sanction order in the modified scheme dt. 29th Nov., 2007, dropping the clause on listing the shares of Mayajaal and with the other clauses remaining the same, including the "effective date", it stands to reason that for all purpose, the effective date given as per the orders of this Court remains as 1st Jan., 2004. Hence, the reflection and the treatment of the transaction as on that date for all purposes as regards the companies involved in the process of amalgamation etc. have to be in tune with the sanction granted under order of this Court. 12. The ITO originally considered the return of income dt. 30th Oct., 2004 relating to the asst. yr. 2004-05 declaring loss. The return filed was with reference to the income of the applicant company alone and the combined income and expenses of five group companies were not considered. It is stated by the applicant that as the accounts were not finalised or awaiting t....
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....the assessing authority refusing to consider the composite scheme effective from 1st Jan., 2004, the applicant has now come before this Court seeking a direction that considering cl. 7.2 of the scheme sanctioned by this Court under orders dt. 12th Oct., 2004 and 8th Nov., 2004 and the order dt. 29th Nov., 2007 taking the effective date of the scheme on and from 1st Jan., 2004, the respondents be directed to act on the revised return filed. 15. Leaving aside the merits of the assessment on the principle of law that the assessment has to follow the scheme sanctioned by this Court, I agree with the submission of the learned counsel for the applicant. Admittedly, the applicant has given effect to the scheme of amalgamation, demerger and arrangement in terms of cl. 7.9 as sanctioned by this Court. 16. The decision reported in Marshall Sons and Co. (India) Ltd. vs. ITO (1997) 138 CTR (SC) 1 : (1997) 88 Comp Cas 528 (SC) deals with a case of amalgamation, particularly with reference to the effective date from which the amalgamation is to take place. The brief facts given in the reported decision are that the assessee therein had its holding company in Calcutta and the subs....
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.... the relevant rules have to be followed and complied with. During the period the proceedings are pending before the Court, both the amalgamating units, i.e., the transferor company and the transferee company may carry on business, as has happened in this case, but normally provision is made for this aspect also in the scheme of amalgamation............" 17. The Supreme Court further pointed out that when the Court had not specified any date as the date of transfer or amalgamation, it would not be reasonable to say that the scheme of amalgamation takes effect from only on and from the date of the order sanctioning the scheme. The apex Court pointed out that till the scheme is sanctioned and on the scheme being granted, the business carried on by the transferor company, namely, subsidiary company in the reported decision, should be deemed to have been carried on for and on behalf of the transferee company and this is the necessary and logical consequence of the Court sanctioning the scheme of amalgamation as presented to it. The apex Court further pointed out as follows:- " ......The order of the Court sanctioning the scheme, the filing of the certified copies of the ....