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2015 (8) TMI 238 - BOMBAY HIGH COURTComposite scheme of arrangement and amalgamation – Regional Director, Ministry of Corporate Affairs opposed scheme as rule that transferee company only can allot shares towards consideration of transfer, and not any other person was not in consonance with section 394 of Companies Act, 1956 – Held that:- Clauses (i) to (vi) of Section 394(1), were merely enabling provisions and cannot be construed as compulsory in nature – Company Court, while sanctioning scheme, may or may not make said provisions – Acceptance of any particular consideration was part of commercial wisdom to be exercised by shareholders of transferor company – As long as such consideration was not against public interest, it was not for company court to accept or reject such consideration – Regional Director made it clear that there was no harm to public interest by present scheme – Thus it was not for present Court to reject consideration, which was accepted by shareholders of transferor company–Scheme of arrangement making provisions for consideration in terms of allotment of shares of companies other than transferee companies approved – Petition allowed – Decision of Miheer Mafatlal vs. Mafatlal Industries Ltd. [1996 (9) TMI 488 - SUPREME COURT OF INDIA], Pantaloon Retail (India) Limited Company [2010 (8) TMI 921 - BOMBAY HIGH COURT]followed – Decided in favour of petitioner. Composite scheme of arrangement and amalgamation – Regional Director, Ministry of Corporate Affairs opposed scheme having regard to definitions of 'demerger' and 'resulting company' contained in Section 2(19AA) and 2(41A) read with Section 2(19AAA) of Income-tax Act, 1961 – Held that:- scheme of arrangement permissible both under Companies Act and Income-tax Act, does not amount to 'demerger' within meaning of Income-tax Act –Provision of scheme relating to demerger makes it clear that in case scheme was inconsistent with Section 2(19AA), provisions of Section 2(19AA) shall prevail and scheme shall stand modified – Also sanction of scheme, does not bind Income-tax Department to take any particular view of scheme of arrangement insofar as tax implications of transaction were concerned.
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