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2012 (8) TMI 623 - AAR - Income TaxMerger with the parent company - Article 8 of the Swiss Merger Act - the applicant had set up a wholly owned subsidiary in India of Switzerland company - Held that:- As the merger and consequent transfer of all assets and liabilities did not generate any gain & on a merger, the transferor is effaced. The transaction undertaken is apparently one sanctioned by Swiss law. The gain if any in this case is not determinable within the scope of section 45 and section 48 of the Act as postulated in the Ruling in Dana Corporation (2009 (11) TMI 32 - AUTHORITY FOR ADVANCE RULINGS ) - no capital gain chargeable to tax under the Act in terms of section 45 read with section 48 can be said to arise. As condition no. (iii), to satisfy that definition what has taken place is amalgamation as defined in section 2(1B), is not satisfied as the shareholders of the applicant merging with ‘company C’ do not or cannot become shareholders of company ‘C’ as company ‘C’ is the only shareholder of the applicant,relaxation of section 47 (via) will be granted but that may be in respect of the shareholders proportion, reduced from 75% to 25%, but the condition itself is not dispensed with. Therefore, in this case, it cannot be postulated that section 47(via) takes the transaction out of the clutches of section 45 - The merger involved in this case, is not exempt from capital gains tax under section 47(via). No obligation on ‘Company C’, parent company to withhold taxes under section 195.
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