TaxTMI 
TaxTMI 
2017 (2) TMI 1463
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....014, whereby this Court had permitted the amalgamation of M/s. Sadashiva Sugars Ltd., with M/s. E.I.D. Parry (India) Ltd., 2. Briefly the facts of the case are that M/s. Sadashiva Sugars Ltd., (Transferor Company) had filed a Company Petition under Section 393 and 394 of the Companies Act, 1956 (`Act' for short) for seeking the sanction of Scheme of Amalgamation between the Transferor Company, and M/s. E.I.D. Parry (India) Ltd., (Transferee Company). By order dated 4.4.2014, this Court had allowed the Scheme of Amalgamation. However, subsequently the Income Tax Department has filed the present Company Application seeking for recalling of the said order. 3. Ms. Sowbhagya N. A., the learned counsel for the applicant, submits that for th....
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....at was permitted by this Court by order dated 4.4.2014 should be recalled. 4. On the other hand, Mr. Saji P. John, the learned counsel for the Transferor Company, has pleaded that Section 72-A of the Act does not contain a bar which would prevent the Transferor Company from amalgamating with the Transferee Company. Section 72-A of the Act merely deals with carry forward and set off of accumulated loss, and unabsorbed depreciation which the company would be entitled to. Moreover, it demarcates the circumstances under which the said benefit can be denied to a company. But, by no stretch of imagination, does it prohibit the amalgamation of two companies which may be suffering losses. Secondly, there is no bar either in the Companies Act, or ....
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....loss and allowance for depreciation shall apply accordingly. (2) Notwithstanding anything contained in sub-section (1), the accumulated loss shall not be set off or carried forward and the unabsorbed depreciation shall not be allowed in the assessment of the amalgamated company unless-- (a) the amalgamating company-- (i) has been engaged in the business, in which the accumulated loss occurred or depreciation remains unabsorbed, for three or more years; (ii) has held continuously as on the date of the amalgamation at least three-fourths of the book value of fixed assets held by it two years prior to the date of amalgamation; (b) the amalgamated company-- (i) holds continuously for a minimum period of five years from the date of ama....
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....fit of set off and carry forward and allowance of depreciation will not be permitted to the amalgamated Company. 9. Sub-section (3) of Section 72A of the Act further states that in case any of the conditions laid down in sub- section (2) are not complied with, then, in fact, the set off of loss, or allowance of depreciation shall be deemed to be the income of the amalgamated Company chargeable to tax in the year in which such condition has not been complied with. Therefore, Section 72A of the Act, in fact, deals with the post-amalgamation scenario. By no stretch of imagination, does Section 72A of the Act debar two companies from amalgamating. In fact, Section 72A of the Act deals with the relationship between the Income Tax Department, an....