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Commissioner of Income Tax Versus M/s. Shaw Wallace Distilleries Ltd.

2016 (6) TMI 431 - CALCUTTA HIGH COURT

Liability arising out of the assessment after amalagamtion - Liability of the amalgamating and amalgamated company - Held that:- On a plain reading of the definition of the expression of “amalgamation”, appearing in the Income Tax Act quoted above, the impression which one receives is that all the liabilities of the amalgamating company immediately before the amalgamation becomes become the liability of the amalgamated company. We are, in this case, concerned, with the assessment year 2002-03, i .....

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ly did not bring this fact to the notice of the assessing officer, the assessee also filed a return for the assessment year 2003-04. Therefore, the assessee itself did not act upon the amalgamation. Be that as it may, by reason of the amalgamation, the order passed on 31st March, 2005, pertaining to the assessment year 2002-2003 could not have become a nullity. The liability arising out of the assessment order became the liability of the amalgamated company - Tribunal was not right in holdin .....

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Mr. A. Mitra, Adv ORDER The Court : The appeal is directed against a judgment and order dated May 31, 2007, passed by the learned Income Tax (Appellate Tribunal, D Bench, Kolkata, in ITA No.1116/Kol/2006, pertaining to the assessment year 2002- 03, by which an appeal preferred by the revenue was dismissed. The aggrieved revenue has come up in appeal. The facts and circumstances of the case, briefly stated, are as follows. Shaw Wallace Distilleries Ltd. filed their return of income on October 31 .....

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icted to the point as to whether the assessment order was a nullity. The contention of the assessee was that the assessment order passed on March 31, 2005 was a nullity because the assessee had merged with Maharashtra Distilleries Ltd. pursuant to an order passed by the High Court at Mumbai on March 2, 2003. The question was whether the assessment order passed on March 31, 2005 was a nullity. This question has been answered against the revenue both by the CIT (Appeal) and the learned Tribunal. T .....

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for the purpose of assessment only when the copy of the written submission along with the paper book in support of the grounds of appeal against the assessment order was sent to the Assessing Officer on 6.12.05. it was further submitted that the facts of the present case are different from the facts in the case of Marshall Sons & Co. Ltd. (223 ITR 809). In the present case, the assessee company puts a proposal of merger with Maharashtra |Distilleries Ltd. before the High Court of Mumbai and .....

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to in the course of assessment proceedings. The assessment was allowed to be completed in the normal course. In this context, it was submitted, the omission to inform the department about the scheme of amalgamation proposed at the time of filing the return is an important matter for consideration. By filing the return of income and by going along with the assessment proceedings as an unamalgamated entity to the extent of filing the appeal against the assessment order also, the appellant asserted .....

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h which they merge or which is formed as a result of the merger, as the amalgamated company) in such a manner that- (i) all the property of the amalgamating company or companies immediately before the amalgamation becomes the property of the amalgamated company by virtue of the amalgamation; (ii) all the liabilities of the amalgamating company or companies immediately before the amalgamation become the liabilities of the amalgamated company by virtue of the amalgamation; (iii) shareholders holdi .....

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stribution of such property to the other company after the winding up of the firstmentioned company; On a plain reading of the definition of the expression of amalgamation , appearing in the Income Tax Act quoted above, the impression which one receives is that all the liabilities of the amalgamating company immediately before the amalgamation becomes become the liability of the amalgamated company. We are, in this case, concerned, with the assessment year 2002-03, i.e. to say pertaining to the .....

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the notice of the assessing officer, the assessee also filed a return for the assessment year 2003-04. Therefore, the assessee itself did not act upon the amalgamation. Be that as it may, by reason of the amalgamation, the order passed on 31st March, 2005, pertaining to the assessment year 2002-2003 could not have become a nullity. The liability arising out of the assessment order became the liability of the amalgamated company The CIT(A) has misapplied the law laid down by the Madras High Cour .....

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bunal. In an appeal preferred by the revenue the Madras High Court held as follows:- The failure on the part of the amalgamating company to distribute the statutory percentage of the accumulated profits is the foundation for the order passed by the Income-tax Officer under section 104. Such failure on the part of the amalgamating company is an omission which had within itself the potential for an order under section 104 being made against it, at any time within a period of four years. By proposi .....

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