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Issues Involved:
1. Validity of the assessment of Marshall Sons and Co. (Mfg.) Ltd. for the assessment years 1984-85 and 1985-86. 2. Effective date of amalgamation of Marshall Sons and Co. (Mfg.) Ltd. with Marshall Sons and Co. (India) Ltd. 3. The impact of the scheme of amalgamation on the tax obligations of the amalgamated company. 4. The relevance of the date January 1, 1982, in the context of the amalgamation. 5. Allegations of tax avoidance through the scheme of amalgamation. Summary: 1. Validity of the assessment of Marshall Sons and Co. (Mfg.) Ltd. for the assessment years 1984-85 and 1985-86: The petitioner argued that the Income-tax Officer (ITO) cannot assess the income of Marshall Sons and Co. (Mfg.) Ltd. for the assessment years 1984-85 and 1985-86 because the company ceased to exist from January 1, 1982, due to its amalgamation with Marshall Sons and Co. (India) Ltd. The respondent countered that the subsidiary company continued to exist until January 20, 1984, and thus, the assessment proceedings for the relevant periods were validly initiated. 2. Effective date of amalgamation of Marshall Sons and Co. (Mfg.) Ltd. with Marshall Sons and Co. (India) Ltd.: The court examined the scheme of amalgamation and the relevant court orders, concluding that the amalgamation could not have taken place on January 1, 1982. The court noted that the scheme's implementation was conditional upon court sanction and the filing of certified copies of the court orders with the Registrars of Companies, which occurred on January 20, 1984, and February 24, 1984. 3. The impact of the scheme of amalgamation on the tax obligations of the amalgamated company: The court emphasized that the scheme of amalgamation was subject to the provisions of the Companies Act and the fulfilment of certain conditions. The court found that the subsidiary company continued to exist until at least January 20, 1984, and thus, the assessment proceedings for the periods in question were valid. 4. The relevance of the date January 1, 1982, in the context of the amalgamation: The court found that the date January 1, 1982, mentioned in the scheme of amalgamation was arbitrary and had no nexus to the actual scheme. The court noted that the scheme was finalized long after this date, and the amalgamation could not have taken effect from January 1, 1982. 5. Allegations of tax avoidance through the scheme of amalgamation: The respondent argued that the scheme of amalgamation was a tax avoidance device. The court, however, did not express an opinion on this matter, as it was unnecessary given the court's interpretation of the scheme's clauses, which clearly indicated that January 1, 1982, was not the effective date of amalgamation. Conclusion: The writ petition was dismissed with costs, as the court found that the amalgamation did not take effect from January 1, 1982, and the subsidiary company continued to exist until January 20, 1984, validating the assessment proceedings for the relevant periods. The court also noted that the subsidiary company remained on the Register of Companies until January 21, 1986.
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