TMI Blog1995 (5) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... essee had claimed M/s Indofil Chemicals Ltd. had been amalgamated with it from 1-7-1982. However, the Assessing Officer held that necessary formalities not having been completed during the year under appeal, the income of the amalgamated company was to be assessed separately. Since assessee had disclosed the income of Indofil Chemicals as its income, the Assessing Officer assessed the same on protective basis. The Assessing Officer also declined to allow deduction on account of advance-tax and TDS amounting to Rs. 65,10,495 paid in the name of indofil Chemicals Ltd. CIT(A) has confirmed the action of the Assessing Officer. The relevant facts relating to this issue are that on 16th September, 1982, the Board of Directors of Modipon Ltd., i.e., the appellant passed a resolution for the merger of Indofil Chemicals Ltd. into this company subject to (i) the approval of shareholders at the General Meeting ; (ii) the High Courts of Allahabad and Bombay ; (iii) the Controller of Capital Issues ; (iv) the Central Government under the Monopolies and Restrictive Trade Practices Act ; and (v) Approval of any such governmental or other authorities as may be required. The said resolution was pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid notices. It was accordingly prayed that assessment of the income of M/s Indofil Chemicals Ltd. in the hands of the assessee may be held to be on substantive basis and deduction of tax paid/recovered in the name of IFCL be allowed to be adjusted against the demand of the assessee. 5. The learned D.R., on the other hand, contended that mere passing of resolution by the companies for amalgamation was not sufficient in completing the amalgamation process. As per provisions of sections 391 and 394 of the Companies Act, certain formalities are to be completed for the merger of the companies. Unless those formalities are completed amalgamation is ineffective and of no consequence. According to the learned D.R. since in this case admittedly all the formalities regarding the amalgamation of the two companies had not been completed by the end of the previous year, which was 30th June, 1985, for the year under appeal the income of IFCL was not assessable in the hands of the assessee. However, since the income had been disclosed by the assessee, the same was rightly assessed on protective basis as declared. 6. We have given our careful consideration to the rival contentions. It is evi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that as per the scheme of amalgamation of a bank with the assessee-company the entire undertaking of the bank would be transferred to the assessee w.e.f. July 1, 1971. On the petitions made to the High Courts under sections 391 and 394 of the Companies Act, 1956, the High Court passed orders w.e.f. 1st July, 1971 directing that the whole of the business and the property and the liabilities of the bank shall stand transferred to the assessee without any further act or deed. According to clause 15 of the scheme of amalgamation the assessee was to approach the Controller of Capital Issues for the purpose of sanction of increase in share capital and the said sanction was obtained on December 31, 1971. Clause 15 of the scheme also provided that even though the scheme of amalgamation was to be operative from July 1, 1971, it was to take effect finally from the date on which any of the sanctions was last obtained. 8. The Income-tax Officer held that the date of amalgamation for the purpose of section 170 was December 31, 1971. On appeal, the Tribunal took the view that the approval of the Controller of Capital Issues was a mere formality in view of the order of the High Court that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following : (a) the requisite sanction or approval, if any, of the Controller of Capital Issues under the Capital Issue (Control) Act, 1947, and of any other appropriate authorities being obtained and granted in the matters in respect of which such sanction or approval are required ; (b) the approval of and agreement to the scheme by the requisite majority of the members of INDOFIL and of the member of MODIPON ; (c) the necessary resolution by the members of MODIPON under section 81 of the Companies Act, 1956 ; (d) the sanctions by the High Court of Judicature at Bombay and the High Court of Judicature at Allahabad under section 391 of the Companies Act, 1957 and to the necessary order under section 394 of the said Act being obtained, and (e) it become fully effective in accordance with sections 391 and 394 of the Companies Act, 1956. This scheme (although operative from the Appointed Day) shall take effect finally upon and from the date on which any of the aforesaid sanctions or approvals shall be last obtained which shall be 'the effective date' for the purpose of this scheme. 12. In clause 20 referred to above, two expressions have been used, namely, appointed d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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