TMI Blog1983 (9) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... as capital gains under section 45 of the I.T. Act, 1961 ? " In order to appreciate the controversy involved, a few facts may be stated. We are concerned in this reference with the assessment year 1964-65 for which the previous year was the year ending on December 31, 1963. One Latham Abercrombie and Co. Ltd. (hereinafter referred to as "Latham Abercrombie ") was a 100% subsidiary company of the assessee. Latham Abercrombie had an issued and paid up capital of Rs. 2 lakhs divided into 2,000 equity shares of Rs. 100 each and the entire lot of 2,000 shares was held by the assessee. The total cost of the share capital shown in its books was at Rs. 1,82,575. By its order dated December 2, 1963, the Bombay High Court approved the scheme of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which could be taxed. The said argument has not been pressed into service before us, and rightly so, inasmuch as the argument has been negatived initially by the Gujarat High Court in CIT v. R. M. Amin [1971] 82 ITR 194, which view has been subsequently approved by the Supreme Court in CIT v. R. M. Amin [1977] 106 ITR 368. However, what has been argued before us is that by the scheme of amalgamation of a 100% subsidiary company with the assessee-company, there can be no accrual of capital gains or sustainment of capital loss. Our attention was drawn in this behalf to the view of the Calcutta High Court expressed in Shaw Wallace Co. Ltd. v. CIT [1979] 119 ITR 399. Before dealing with the Calcutta decision, we may point out that the amend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsferor-companies represented the capital invested by the assessee in the said companies and by the said amalgamations the is assessee became the sole owner of the entire capital of the transferor-companies. By virtue of the said amalgamations the assessee as the transferee-company became the sole repository of all the rights which flowed from or were imbedded in the shares held by the assessee in the transferor-companies. In other words, it has been observed by the learned judge of the Calcutta High Court that the result of the amalgamation was not securing of any additional amount or asset by the assessee-company but blending of the assets of the transferor-company with it, and, in Pursuance of that scheme of amalgamation, there was the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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