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2022 (12) TMI 223 - AT - Income TaxLong term capital loss on sale of equity shares - Approved Amalgamation Scheme - merged entity to have the benefit of carry forward of loss - HELD THAT:- it is not in dispute that assessee had sold the shares @ Rs.200/- per share being the purchase cost. The sale price of Rs.200 per share has not been disputed by the Revenue at all. In fact, the market price as per the Bombay Stock Exchange on the date of sale was only Rs.58/- per share whereas the assessee has sold the shares at much higher price of Rs.200/- per share. Merely because this transaction had resulted in long term capital loss which had also admittedly arose only due to the benefit of indexation which is statutorily available to the assessee, the Revenue in the instant case is trying to treat the entire transaction as a colourable device and making the assessee act as a conduit to enable the merged entity to have the benefit of carry forward of loss. All these allegations are made by the Ld.AO absolutely without any basis. This is a classic case where the Ld.AO had denied the benefit which is statutorily available to the assessee as per the Act. In any case, the scheme of merger had already contemplated these transactions of loss on shares by including the same in the scheme and had also considered the loss incurred by the transferor company getting vested with the transferee company pursuant to the scheme of amalgamation. This scheme of amalgamation has been approved by the Hon’ble Bombay High Court vide its order dated 5/3/2013 with effective date of 7/7/2011. Now once the scheme of amalgamation has been approved by the Hon’ble High Court, all the assets and liabilities of the transferor company including the losses would get automatically vested with the transferee company. The same cannot be disturbed or disputed by the Ld.AO at the time of implementation of the scheme of amalgamation. Hon’ble Jurisdictional High Court in the case of Sadanand S Varde & Ors vs State of Maharashtra & Ors [2000 (6) TMI 16 - BOMBAY HIGH COURT] had categorically held that order of the Company Court sanctioning the scheme of amalgamation would be binding and the same cannot be permitted to be challenged in a collateral proceeding. We do not find any infirmity in the order of Ld.CIT(A) allowing the claim of long term capital loss in the hands of the assessee company. Accordingly, grounds raised by the Revenue are dismissed.
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