Home Case Index All Cases Income Tax Income Tax + AAR Income Tax - 2010 (1) TMI AAR This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2010 (1) TMI 46 - AAR - Income TaxAmalgamation – Tax Avoidance - Consolidation of Indian language channels viz., Star Plus, Star Gold and Star One/Star Utsav into the Indian Company - SIPL and accordingly, it has been resolved that STEL, SAML and SAR together with its assets and liabilities should be amalgamated with and merged into SIPL, the Indian company. SIPL will in turn issue shares to the share holders of the amalgamating companies (applicants) in accordance with the share exchange ratio arrived at by a professional valuation report – question: Whether the amalgamation, as defined under Section 2 (1B) of the I.T. Act, 1961, of STEL, SAML and SAR with Star India Private Limited, an Indian company, will result in any liability under the I.T. Act in the hands of the applicants and their share holders – held that - it is not permissible for this Authority to draw an inference at this stage that the amalgamation is only a ruse or a deliberate plan to evade the payment of income tax arrears. - the premise on the basis of which the Revenue has built up its argument that amalgamation is just a colourable device or subterfuge to avoid the tax liability on account of capital gains and there is no other business purpose or expediency behind the purported amalgamation, is not, in our view, sound and acceptable. - . A design to avoid the tax within the meaning of clause (iii) of the proviso to Section 245 R(2) apparently covers such of the transactions which are sham or nominal or which would lead to the inescapable inference of a contrived device solely with a view to avoid the tax - that no tax liability arises under the Income Tax Act in respect of the transfer of assets/shares pursuant to and as a part of the terms of amalgamation.
|