TaxTMI 
TaxTMI 
TaxTMI 
2024 (2) TMI 1567
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....cknowledged and taken note of the Scheme of Arrangement, as would be evident from reading of its order dated 21 September 2015 and which had referred to that Scheme having been duly sanctioned by this Court on 24 April 2014. 3. In view of the aforesaid, it is manifest that the principles enunciated by the Supreme Court in Principal Commissioner of Income Tax v. M/s Mahagun Realtors (P) Ltd [2022 SCC OnLine SC 407] would apply. 4. We note that while dealing with such a situation and where an assessment order comes to be drawn in the name of the company which has ceased to exist, the Supreme Court in Mahagun Realtors has held as follows:- "20. In Saraswati Syndicate (supra), the facts were that after amalgamation, the transferee-company claimed exemption from tax, of a sum which had been allowed as a trading liability - on accrual basis, in the hands of the transferee-company which had ceased to exist. The Revenue disallowed that claim ; that view was upheld. This court stated that : "In an amalgamation two or more companies are fused into one by merger or by taking over by another. Reconstruction or 'amalgamation' has no precise legal meaning. The amalgamation is a ble....
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....ny, therefore the transferee-company was the legal tenant and there was no question of any sub-letting. The rent controller and the High Court both decreed the landlord's suit. This court in appeal held that under the order of amalgamation made on the basis of the High Court's order, the transferor-company ceased to be in existence in the eye of law and it effaced itself for all practical purposes. This decision lays down that after the amalgamation of the two companies the transferor-company ceased to have any entity and the amalgamated company acquired a new status and it was not possible to treat the two companies as partners or jointly liable in respect of their liabilities and assets. In the instant case the Tribunal rightly held that the appellant-company was a separate entity and a different assessee, therefore, the allowance made to Indian Sugar Company, which was a different assessee, could not be held to be the income of the amalgamated company for purposes of section 41(1) of the Act. The High Court was in error in holding that even after amalgamation of two companies, the transferor-company did not become non-existent instead it continued its entity in a blended....
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....s happened in this case but normally provision is made for this aspect also in the scheme of amalgamation. In the present scheme, clause 6(b) does expressly provide that with effect from the transfer date, the transferor company (subsidiary company) shall be deemed to have carried on the business for and on behalf of the transferee company (holding company) with all attendant consequences. It is equally relevant to notice that the courts have not only sanctioned the scheme in this case but have also not specified any other date as the date of transfer/amalgamation. In such a situation, it would not be reasonable to say that the scheme of amalgamation takes effect on and from the date of the order sanctioning the scheme. We are, therefore, of the opinion that the notices issued by the Income-tax Officer (impugned in the writ petition) were not warranted in law. The business carried on by the transferor company (subsidiary company) should be deemed to have been carried on for and on behalf of the transferee company. This is the necessary and the logical consequence of the court sanctioning the scheme of amalgamation as presented to it. The order of the court sanctioning the scheme, t....
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.... of the amalgamating company or companies immediately before the amalgamation becomes the property of the amalgamated company by virtue of the amalgamation ; (ii) all the liabilities of the amalgamating company or companies immediately before the amalgamation, become the liabilities of the amalgamated company by virtue of the amalgamation ; (iii) shareholders holding not less than nine-tenths in value of the shares in the amalgamating company or companies (other than shares already held therein immediately before the amalgamation by, or by a nominee for, the amalgamated company or its subsidiary) become shareholders of the amalgamated company by virtue of the amalgamation, otherwise than as a result of the acquisition of the property of one company by another company pursuant to the purchase of such property by the other company or as a result of the distribution of such property to the other company after the winding up of the first mentioned company ;" 31. In Maruti Suzuki (supra), the scheme of amalgamation was approved on January 29, 2013 with effect from April 1, 2012, the same was intimated to the Assessing Officer on April 2, 2013, and the notice under section 143(2)....