TMI Blog2017 (2) TMI 1463X X X X Extracts X X X X X X X X Extracts X X X X ..... does Section 72A of the Act debar two companies from amalgamating. In fact, Section 72A of the Act deals with the relationship between the Income Tax Department, and the assessee in the post-amalgamated period. Therefore, the contention being raised by the learned counsel for the Revenue that under Section 72A of the Act, amalgamation between two companies suffering from losses is prohibited, the said argument is highly misplaced. Since Section 72A of the Act does entitle the amalgamated company to claim set off and carry forward of losses and allowance depreciation, therefore, if any benefit accrues to the amalgamated Company, that benefit cannot be denied ostensibly on the ground that it is the Revenue Department that would suffer. Hen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tween the Transferor Company, and M/s. E.I.D. Parry (India) Ltd., (Transferee Company). By order dated 4.4.2014, this Court had allowed the Scheme of Amalgamation. However, subsequently the Income Tax Department has filed the present Company Application seeking for recalling of the said order. 3. Ms. Sowbhagya N. A., the learned counsel for the applicant, submits that for the Assessment year 2009-10, 2010-11, 2012-13 and 2013-14, the Transferor Company has declared its income as `NIL'. Moreover, it has claimed carry forward of the losses for the above mentioned Assessment Years. Similarly, even the Transferee Company has been suffering losses for number of years, and has carried forward the same to the subsequent years. Therefore, ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith carry forward and set off of accumulated loss, and unabsorbed depreciation which the company would be entitled to. Moreover, it demarcates the circumstances under which the said benefit can be denied to a company. But, by no stretch of imagination, does it prohibit the amalgamation of two companies which may be suffering losses. Secondly, there is no bar either in the Companies Act, or in the Income Tax Act, which prevents the two companies, which are suffering losses, from amalgamating. Thirdly, the benefits which would accrue to the companies accrues in accordance with the Act. Therefore, even if the Revenue Department were to claim that it will suffer, the said claim cannot be translated into a `bar'. Therefore, the order d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the business, in which the accumulated loss occurred or depreciation remains unabsorbed, for three or more years; (ii) has held continuously as on the date of the amalgamation at least three-fourths of the book value of fixed assets held by it two years prior to the date of amalgamation; (b) the amalgamated company-- (i) holds continuously for a minimum period of five years from the date of amalgamation at least three-fourths of the book value of fixed assets of the amalgamating company acquired in a scheme of amalgamation; (ii) continues the business of the amalgamating company for a minimum period of five years from the date of amalgamation; (iii) fulfils such other conditions as may be prescribed to ensure the reviva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all be deemed to be the income of the amalgamated Company chargeable to tax in the year in which such condition has not been complied with. Therefore, Section 72A of the Act, in fact, deals with the post-amalgamation scenario. By no stretch of imagination, does Section 72A of the Act debar two companies from amalgamating. In fact, Section 72A of the Act deals with the relationship between the Income Tax Department, and the assessee in the post-amalgamated period. Therefore, the contention being raised by the learned counsel for the Revenue that under Section 72A of the Act, amalgamation between two companies suffering from losses is prohibited, the said argument is highly misplaced. 10. Since Section 72A of the Act does entitle the amalg ..... X X X X Extracts X X X X X X X X Extracts X X X X
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