TaxTMI 
TaxTMI 
2020 (11) TMI 803
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....meeting held on August 9, 2019 and August 12, 2019 have accorded their approval for composite scheme of arrangement and amalgamation (hereinafter referred to as "Scheme") as contemplated between the petitioner companies, in and by which it has been decided to cancel and reduce 9,260 equity shares of face value of INR 10 of the transferee company and then amalgamation of all the transferor company Nos. 1, 2, 3, 4, 5 and 6 with the transferee company. The Scheme is annexed as annexure "A1" to the typed set filed along with the petition. 3. First motion application-in brief 3.1. The transferor and transferee companies have filed the first motion application jointly vide C. A. No. 1156/CAA/2019 seeking for directions for convening the meeting of the equity shareholders and unsecured creditors and for dispensing with the requirement of convening the meeting of the secured creditors of all the companies involved in the Scheme and based on such application moved under sections 230-232 of the Companies Act, 2013 ; directions were issued by this Tribunal, vide order dated November 7, 2019. Subsequent to the said order, the meeting of the shareholders of the respective transferor compa....
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....r publication as directed by the Tribunal in one issue of News Today (Chennai edition) in English and Makkal Kural (Chennai edition) in Tamil on February 24, 2020. It is also seen that notices have been also served to (i) the Regional Director, Southern Region, Chennai on February 24, 2020, (ii) the Registrar of Companies, Chennai on February 24, 2020, (iii) the Assessing Officer, Income-tax Department on February 24, 2020, (iv) the official liquidator on February 24, 2020 and in relation to transferor company No. 4 notices were also served to Reserve Bank of India on April 25, 2020 and the proof of the same by way of acknowledgments/ receipts have been enclosed. Pursuant to the service of notice of the petition the following statutory authorities have responded as follows. 7. Statutory authorities 7.1. Regional director The Regional Director (hereinafter referred to as "RD") Chennai to whom the notice was issued in the first motion itself, has filed his report on February 10, 2020 before this Tribunal and has stated that paragraph 16 of Part E of the Scheme provides for the protection of the interest of the employees of the transferor companies. It was further observed th....
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.... bank statements are available up to date. * All the transferor companies were physically inspected and all of them were performing at the time of inspection as on January 8, 2020. * The transferor companies have filed all the statutory returns with the Registrar and Income-tax for the past five years and the returns are filed up to date. * There are no IT appeals in any forum, i. e., CIT(A), ITAT, High Court or Supreme Court. * GST returns are up to date and there are no GST appeals in any forum. TDS has been remitted with the Government authorities within the prescribed time limit. * The details of the contingent liabilities as on March 31, 2019 (audited) are as follows : Sl. No. Name of the company Amount in (Rs.) 1. Aztec Auto Ltd. - 2. Freins Metals Ltd. 12,30,186 3. Freins Engineering Ltd. 3,88,581 4. Task Pressings Ltd. - 5. Wichitra Auto Ltd. - 6. Modular Auto Ltd. - * The transferor companies have not accepted any public deposits. 7.5. From the above observations made by the chartered accountants, the official liquidator sought to take on record and consi....
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.... Tribunal is not shutting out the legitimate interest of the Income-tax authorities to recover the lawful dues payable by the transferor companies and since the transferee company is not being dis solved and the Scheme provides the savings in relation to the liabilities as well, the rights of the tax authorities remain intact and they can proceed against the transferee company in accordance with law, if any amount is found due and payable. The hon'ble National Company Law Appellate Tribunal also in the Ad2Pro Global Creative Solutions P. Ltd. v. Regional Director, (SER), Ministry of Corporate Affairs [2019] 217 Comp Cas 443 (NCLAT), in Company Appeal (AT) No. 98 of 2019, in relation to the dues of the Income-tax has held in paragraph 7 as follows (page 449) : "Admittedly, proceedings are pending in appeal before the Income-tax Appellate Tribunal and depending upon the outcome of such proceedings, the transferee company has undertaken to satisfy all demands emanating from and raised by the competent tax authorities. The scheme having been approved and sanctioned and the same being in consonance with law, no fault can be found with the transferee's undertaking to sat....
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....o the valuation report obtained from one R. Vaidyanathan, registered valuer dated August 8, 2019 wherein it has been recommended by the independent valuer as follows : * TEL (transferee company) to issue 174,165 optionally convertible redeemable preference shares of Rs. 100 each as fully paid-up, at a premium of Rs. 166.20 each to the shareholders of AAL (transferor company No. 1). * TEL (transferee company) to issue 168,048 optionally convertible redeemable preference shares of Rs. 100 each as fully paid-up, at a premium of Rs. 166.20 each to the shareholders (other than the inter-company shareholders) of FML (transferor company No. 2). * TEL (transferee company) to issue 325,580 optionally convertible redeemable preference shares of Rs. 100 each as fully paid-up, at a premium of Rs. 166.20 each to the shareholders (other than the inter-company shareholders) of FEL (transferor company No. 3). * TEL (transferee company) to issue 137,102 optionally convertible redeemable preference shares of Rs. 100 each as fully paid-up, at a premium of Rs. 166.20 each to the shareholders of TPL (transferor company No. 4). * TEL (transferee company) to i....
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....rs and officials of the petitioners. 10.4. While approving the scheme as above, it is clarified that this order should not be construed as an order in any way granting exemption from payment of stamp duty, taxes or any other charges, if any, payment is due or required in accordance with law or in respect to any permission/compliance with any other requirement which may be specifically required under any law. 11. This Tribunal do further order : (i) That the equity share capital of the transferee company shall be reduced from 283,600 equity shares of Rs. 100 each to Rs. 274,340 equity shares of Rs. 100 each for a consideration of Rs. 24,65,012. (ii) That the securities premium account (SPA) of the transferee company which is at Rs. 1,59,52,500 upon payment of the consideration per share, shall be reduced to Rs. 1,44,13,488. (iii) That on payment of consideration, the shareholders holding the reduced shares shall furnish the share certificates to the transferee company, representing the reduced share and the same shall be cancelled by the transferee company. (iv) That all properties, right and interest of transferor companies Nos. 1 to 6 shal....