1990 (9) TMI 1 - SUPREME COURT

Whether, on the amalgamation of the Indian Sugar Company with the appellant-company, the Indian Sugar Company continued to have its identity and was alive for the purposes of section 41(1) of the Act?

Held that:- Appeal allowed. When two companies amalgamate and merge into one, the transferor-company loses its entity as it ceases to have its business. However, their respective rights and liabilities are determined under the scheme of amalgamation but the corporate entity of the transferor-company ceases to exist with effect from the date the amalgamation is made effective. We agree with the Tribunal's view that the amalgamating company ceased to exist in the eye of law and therefore, the appellant was not liable to pay tax on the amount of ₹ 58,735. Thus set aside the order of the High Court and answer the question in favour of the assessee and against the Revenue.