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2010 (12) TMI 912 - AT - Income TaxRestricting the disallowance on account of earning exempt income to 1/3rd by CIT(A) - Held that:- Because of the merger of IIPL into the assessee company, the former came to an end as a result of which the shares of amalgamated company were allotted to the share holders of IIPL. Thus, it is clear that there is no change in the management of the Company which remained with the same family (set of persons) who was earlier exercising control. The assessee submitted a list of directors on the Board of the two companies prior to merger as well as the directors on the Board of merged company. It remained in the same hands. Thus, CIT (Appeals) is correct in holding that change in more than 51% was due to merger in two companies. There was no change in control and management. Thus find considerable cogency in the part of the CIT(Appeals)'s adjudication wherein he has referred the Circular No. 528 dated 16.12.88 and considered the case of the present merger as akin to death of share holder. Also in the case of death of a living person the shares held by him get transferred to his legal heirs. Similarly when existence of a company is legally finished, the benefit of assets held by it (including shares of other company) will pass on to its shares holders. Under the circumstances, it is fully agreeable with the view of the CIT(Appeals) and do not find any infirmity or illegality in his order. Against revenue.
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