TaxTMI 
TaxTMI 
2018 (3) TMI 201
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....ring in any party of the Scheme, as if it were never a part of the Scheme. 5. All consequential amendments as required. 2. Clause 2(e) and 2(f) of the Scheme read as under : e. "Demerged Undertaking" means and includes: i. All the investments of the Demerged Company. ii. Windmill business means "windmill business" comprising of all assets (whether movables or immovables, tangible or intangible, real or personal, corporeal or incorporeal or present, future or contingent) and liabilities which relate thereto or are necessary therefore including specifying the following: (a) Wind energy generator facility presently operating at Gut No.64/4P, Village; Akhatwade, Taluka, Nandurbar, Dist; Nandurbar, Maharashtra together with all that piece or parcel of freehold/leasehold lands, hereditaments and premises situate, lying and being thereat together with all civil structures standing thereon. (b) All wind energy generators, movable and fixed plants and machinery equipments, installations, plants, pipes, tools, accessories, computers, furniture, fixtures, office equipments, power lines, water lines, relating to windmill business. (c) All c....
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.... credits, loans and advances, earnest money, deposits with any government, quasi government, local or other authority or body, or any company or other person, investments of all kinds, rights to use telephones, telexes, facsimile connections, email, internet, leased line connections and installations, utilities and other services, reserves, provisions, funds, and all other interests, easements and privileges of all kinds, if any of whatsoever nature and wherever situated belonging to or in the ownership, power or possession and in the control of or vested in or granted in favour of or enjoyed by the Demerged Company which pertains to the Windmill business as on the Appointed Date. ii. All the debts, liabilities (including contingent liabilities), advances, duties, loans taken, deposits accepted, facility availed, any guarantees relating to the business executed by the Demerged Company in favour of third party, undertakings or any other obligations (whether in Indian Rupees or foreign currency, whether in present or future and whether secured or unsecured) of the Demerged Company which relates to the windmill business as on the Appointed Date: iii. All statutory li....
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....nterest, claims and benefits thereunder relating to windmill business. 3. The Scheme of Arrangement between two applicants, viz., applicant in company application no.580 of 2016 - Associates Aluminium Industries (P) Ltd. (Transferor) and applicant in company application no.581 of 2016 - Associated Aluminium Products (P) Ltd. (Transferee) was sanctioned by this Court by an order dated 13th September, 2013. The Scheme has been made effective by Transferee filing copy of the order and Scheme alongwith Form 21 with the Registrar of Companies on 15th October, 2013. 4. In terms of clause 2(e) of the Scheme, Transferor was to demerge all its investment business, windmill business, office premises at 122B, Mittal Court, Nariman Point, Mumbai - 400 021 and land and building at Plot No.10, MIDC Industrial Area, Taloja - 410 208, District Raigad to Transferee. The Windmill Business Undertaking has been defined in detail under clause 2(f) of the Scheme as quoted above. 5. Transferor was enjoying various tax benefits while it was carrying on the Windmill Business and was involved in generation and distribution of power and setting up of various infrastructural facilities for dis....
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....5.9 The above submission/contention of the assessee company is perused and considered carefully, however found not tenable. Since the legal position on the issue of allowability of deduction to the eligible undertaking/enterprise is clarified in the provisions of section itself. In this regard provisions of Section 80IA (12A) clarifies that no deduction shall be available to the amalgamated company when the enterprise or undertaking of an Indian company entitled to the deduction under the said section is transferred on or after 01-04-2007 in the scheme of amalgamation or demerger. This position has further been clarified by Board's circular as cited above. In the present case under consideration M/s. Associated Aluminium Industries (P) Ltd. being an Indian company who was entitled to the deduction u/s80IA, transferred its Windmill running business to M/s. Associated Aluminium Products (P) Ltd. Here M/s. Associated Aluminium Industries (P) Ltd. being the Transferor company was claiming deduction from A.Y.2010-11 which was the initial Assessment Year as per Form No.10CCB. In assessee's case Demerger has been happened from 01-04-2012, i.e., after the date specified....
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....d the same reads as under : 392. Power of High Court to enforce compromises and arrangements. (1) Where a High Court makes an order under section 391 sanctioning a compromise or an arrangement in respect of a company, it (a) shall have power to supervise the carrying out of the compromise or arrangement; and (b) may, at the time of making such order or at any time thereafter, give such directions in regard to any matter or make such modifications in the compromise or arrangement as it may consider necessary for the proper working of the compromise or arrangement. (2) If the Court aforesaid is satisfied that a compromise or arrangement sanctioned under section 391 cannot be worked satisfactorily with or without modifications, it may, either on its own motion or on the application of any person interested in the affairs of the company, make an order winding up the company, and such an order shall be deemed to be an order made under section 433 of this Act. (3) The provisions of this section shall, so far as may be, also apply to a company in respect of which an order has been made before the commencement of this Act under section 153 of the Indian Compan....
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....ssary to ensure the proper functioning of the Scheme. Further, while the Court does state that the powers of the court are of the widest amplitude, including the power to modify a provision of the scheme, it also does hold that the same can only be exercised so as to ensue the proper working of the Scheme and further, that such powers may not be exercised in a manner that would alter the "basic fabric" of the scheme. The removal of obstacles, impediments or hitches cannot be held to mean wholesale changes in the scheme itself and go beyond the confines of what the shareholders, the stakeholders and the courts that sanctioned the scheme would have understood the provisions of the scheme to mean. It is true that in paragraph 26 of the said decision in S.K. Gupta case it was stated that "if something can be omitted or something can be added to a scheme of compromise by the Court, on its own motion or on the application of a person interested in the affairs of the company" then there ought not to be any justification for restricting the meaning of the word of modification and whittle down the powers of the court. However, the next paragraph holds the key to the judgment that the ....
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.... that it is inclusive definition and where in a definition clause the word 'include' is used it is so done in order to enlarge the meaning of the words or phrases occurring in the body of the statute and when it is so used, these words or phrases must be construed as comprehending not only such things which they signify according to their natural import, but also those things which the interpretation clause declares that they shall include (see Dilworth v. Commissioner of Stamps). Where in a definition section of a statute a word is defined to mean a certain thing, wherever that word is used in that statute, it shall mean what is stated in the definition unless the context otherwise requires. But where the definition is an inclusive definition, the word not only bears its ordinary, popular and natural sense whenever that would be applicable but it also bears its extended statutory meaning. At any rate, such expansive definition should be so construed as not cutting down the enacting provisions of an Act unless the phrase is absolutely clear in having opposite effect (see Jobbins v. Middlesex County Council). Where the definition of an expression in a definition clause is pr....
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....omise and/or arrangement for the purpose of making it workable in course of its continued supervision as ordained by s.392 (1). 28. Strictly speaking, omission of the original sponsor and substituting another one would not change the 'basic fabric' of the scheme. The scheme in this case is one by which a compromise is offered to the unsecured creditors of the company and whoever comes in as sponsor would be bound by it. Undoubtedly a sponsor of the scheme enjoys an important place in the scheme of compromise and/or arrangement but basically the scheme is between the company and its creditors or any class of them, or the company and its members or any class of them, and not between the sponsor of the scheme and the creditor or member. The scheme represents a contract sanctified by Court's approval between the company and the creditors and/or members of the company. The company may as well be in charge of directors and the implementation of the scheme may come through the agency of directors but that would not lead to the conclusion that during the working of the scheme the directors cannot be changed. If the scheme has to be ultimately implemented by the company as pa....
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....te of approval of merger by the licensor, the prevailing spectrum allocation criterion, that any permission for merger shall be accorded only after completion of 3 years from the effective date of licences. Neither in the merger applications nor in the demerger applications were copies of licences or the Merger Guidelines 2008, or the correspondence exchanged between the appellant and the Department of Telecommunications placed on record. The High Court sanctioned the scheme of amalgamation which provided that overlapping licences would be transferred in accordance with the scheme of demerger. Upon the merger scheme being sanctioned by the Court, overlapping licences stood vested in the appellant and that the Department of Telecommunications had no other option but to grant its formal approval for transfer of licences. The Department of Telecommunications, however, refused permission and on the ground that the amalgamation of Spice with the appellant was resorted to without the knowledge or taking consent of or notice of the proceedings to it, moved an application for recall of the orders of sanction and demerger of the two companies. The Learned Single Judge held, by notifying tha....