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2020 (12) TMI 949 - HC - VAT and Sales TaxNon-issuance of Form-D - approval of the scheme of amalgamation by the Hon'ble High Court of Delhi - Section 391 and 394 of the Companies Act - infringement of exemptions granted by the State Government vide notification dated 03.03.2016 - merger and amalgamation done under Section 391 and 394 of the Indian Companies Act - HELD THAT:- The action of respondents in not issuing Form D in favour of Revisionist in pursuance of order dated 26.2.2016 is unjustified and arbitrary as the stock transferred on merger of Company has been treated to be sold by the transferor Company without there being any evidence with the Department to substantiate such claim - The action of respondents in not issuing Form D in favour of the revisionist also ignores the exemption granted by the State Government by notification dated 3.3.2016. The Tribunal as well as Assessing Authority and the Appellate Authority failed to appreciate that by virtue of merger and amalgamation having been done under Sections 391 and 394 of Indian Companies Act, tax benefits and exemptions that were available to Transferor Company would also enure to the Transferee Company i.e. Revisionist. The Hon'ble Supreme Court in M/s Dalmia Power Ltd. and another vs. Assistant Commissioner of Income Tax Circle 1, Trichy, [2019 (12) TMI 991 - SUPREME COURT] has considered the consequences of merger of two Companies on the basis of an approved Amalgamation Scheme - The Supreme Court made these observations in a case where revised Income Tax Returns were rejected by the Department on merger of the transferor and transferee Company. The Supreme Court relied upon its observations in MARSHALL SONS AND COMPANY (INDIA) LIMITED VERSUS INCOME-TAX OFFICER [1996 (11) TMI 6 - SUPREME COURT] to observe that pursuant to the Scheme of Arrangement and Amalgamation, the assessment of the transferee Company must take into account the income of both the transferor and transferee Companies - It was observed that filing of revised returns by the transferee Company was not because of any omission or wrong statement contained in the original returns but because delay occurred on account of time taken to obtain sanction of the Scheme of Amalgamation. In the present case the predecessor Company/transferor Company have been succeeded by the Revisionist/ transferee Company who had taken over its business along with assets, liabilities, profits and losses etc. The stock transferred as a result of amalgamation was not a sale requiring issuance of certificate by M/s. Ritesh Vyaapar Ltd. in favour of the Revisionist as per the Exemption Notification of 2016. The questions on which the Revision was initially admitted are answered in favour of the Revisionist - Revision allowed.
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