Amendment of section 47.
15. In section 47 of the Income-tax Act, in clause (vii), in sub-clause (a), for the words “amalgamated company, and”, the words “amalgamated company except where the shareholder itself is the amalgamated company, and” shall be substituted with effect from the 1st day of April, 2013.
Notes on Clauses:
Clause 15 of the Bill seeks to amend section 47 of the Income-tax Act relating to transactions not regarded as transfer.
Under the existing provisions contained in sub-clause (a) of clause (vii) of the aforesaid section 47, in case of a merger, any transfer of capital asset being shares, held by a shareholder in the amalgamating company, shall not be regarded as transfer, if-
(a) such transfer is made in consideration of the allotment to him of any share or shares in the amalgamated company, and
(b) the amalgamated company is an Indian Company.
It is proposed to amend the aforesaid sub-clause so as to provide that to the extent where the amalgamated company itself is the shareholder in the amalgamating company, it shall not be necessary for it to issue share or shares.
This amendment will take effect from 1st April, 2013 and will, accordingly, apply in relation to the assessment year 2013-2014 and subsequent assessment years.
