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2020 (7) TMI 663 - MADRAS HIGH COURTEntitled for exemption u/s 47(v) with respect to the transfer of land - Holding company - determination of 100% subsidiary company where 25 shares held by 6 nominees - Tribunal holding that assessee is entitled for exemption under Section 47(v) - whether Tribunal correctly held that whole of the share capital of the assessee/subsidiary company is held by the holding company viz. M/s.Simpson & Co Ltd., even though 25 shares were held by persons other than the holding company? - HELD THAT:- Section 47 of the Act deals with transaction not regarded as transfer. Section 47(v) of the Act states that nothing contained in Section 45 of the Act shall apply to any transfer of capital asset by subsidiary company to the holding company if (a) the whole of the share capital of the subsidiary company is held by the holding company, and (b) the holding company is an Indian company. The fact that the company is an Indian company is not disputed. The dispute raised by the Revenue is that whole of the share capital of the subsidiary company is not held by the holding company as there are six individual shareholders. Total number of shares are 80 lakhs, out of which, 79,99,975 shares are held by the holding company. This fact is also not disputed by the Revenue. The remaining 25 shares are held by six individuals. The explanation offered by the assessee is that under the Companies Act, a public limited company should have a minimum of seven shareholders. The individuals are nominees of the holding company and they have no individual right, which facts were also not disputed. Therefore, on facts, it has to be held that whole of the share capital of the subsidiary company is held by the holding company in the instant case. The reliance placed on the decision PAPILION INVESTMENTS (P.) LTD. [2009 (8) TMI 832 - BOMBAY HIGH COURT] merits acceptance wherein more or less identical factual situation was taken into consideration and it was held that the beneficial ownership of the holding company is to be taken note of and a proper interpretation is not given to the facts, as it would render the provisions of Section 47(v) of the Act redundant we hold that the order passed by the Tribunal does not call for any interference - Decided against revenue.
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