TaxTMI 
TaxTMI 
2020 (11) TMI 293
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....their respective Board meetings by passing Board Resolutions dated 10th September 2018 and thereafter, they have approached the Tribunal for sanction of the Scheme. 4. The Transferor Company is presently carrying on the business of trading in goods and commodities. The Transferee Company is presently carrying on the business of Logistics & Warehousing Services and Business & Infrastructure Support Services. 5. The Rationale for the Scheme of Merger is - The Transferor Company is a wholly owned subsidiary of the Transferee Company. The amalgamation will help to reduce administrative costs, avoid duplication of processes and result in internal economies and optimize profitability. The integration proposed would enable cost savings, optimum utilization of available resources, will make management control systems more efficient and effective which will enhance the management focus thereby not only leading to higher profitability but will also increase the shareholders' value of both companies. The business of the Transferor Company can be conveniently combined with the business of the Transferee Company and the amalgamation will reduce multiple companies by consolidation o....
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....n Crores Eighty Two Lakhs Seventy Thousand only) comprising of 98,27,000 (Ninety Eight Lakhs Twenty Seven Thousand) Equity Shares of Rs. 10/- (Rupees Ten only) each and 100,000 - 12% Cumulative Redeemable Preference Shares of Rs. 100/- each which is within the combined authorized share capitals of the Transferee Company and the Transferor Company. 10. Learned Counsel for the Petitioner Companies further states that the Petitioner Companies have complied with all the directions passed by this Tribunal in the Company Scheme Application Nos. 1162 and 1163 of 2018 and the Company Scheme Petition Nos. 3835 and 3865 of 2019 filed in this Tribunal are in consonance with the Orders passed in the said Company Scheme Applications and Company Scheme Petitions. 11. Learned Counsel for the Petitioner Companies has stated that the Petitioner Companies have complied with all the requirements as per the directions of this Tribunal and the Petitioner Companies have filed necessary affidavits of compliance in this Tribunal. 12. The Official Liquidator has filed before this Tribunal his Report dated 8th January 2020 stating that the affairs of the Transferor Company have been conducted in a ....
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.... may kindly direct the petitioners to file an affidavit to the extent that the Scheme enclosed to Company Application & Company Petition, are same and there is no discrepancy/any change/changes are made. (f) As regards the complaints indicated in para 9 of Clause III above, under the head - Report of the Income tax Department, the Hon'ble Bench may direct to the Petitioner Company to undertake in this regard." 14. In response to the above observations of the Regional Director, the Petitioner Companies have filed Affidavit in Reply dated 22nd January 2020. The Petitioner Companies clarify and undertake as under: (i) As far as the observation made in paragraph IV (a) of the Representation of the Regional Director is concerned, the Transferee Company undertakes that in addition to compliance of AS-14 (IND AS-103), in case applicable, the Transferee Company shall pass such accounting entries which are necessary in connection with the Scheme to comply with other applicable Accounting Standards such as AS-5(IND AS-8), etc.; (ii) As far as the observation made in paragraph IV (b) of the Representation of the Regional Director is concerned, the Petitioner ....
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.... the Company Scheme Petitions is one and the same and no discrepancy or change or changes are made. (vi) As far as the observation made in paragraph IV (f) of the Representation of the Regional Director is concerned, the Regional Director has referred to the observations of the Income Tax authority set out in Paragraph 9 of Clause III of the Representation which are as under: 9. Report of Income Tax Department:- Income Tax Department report dated 26.12.2019 inter-alia mention the following: 1. Impact of exemption of capital gain tax: "The Income Tax Department will be free to examine the aspect of any tax payable as a result of the Scheme and in case it is found that the Scheme of Amalgamation ultimately results in avoidance of capital gain tax, then the Department will be at liberty to initiate the appropriate course of action as per law. Any Scheme of Amalgamation under Section 230 to 232 of the Companies Act, 2013 should not adversely impact the rights of the Income Tax Department for any present or future proceedings. The Department should be at liberty to take appropriate action as per law in case of an event of any tax-avoidance or....