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TMI Blog2020 (9) TMI 1018X X X X Extracts X X X X X X X X Extracts X X X X ..... ide order dated 19.02.2013 on the following substantial question of law: (i) Whether the Appellate Authorities were correct in allowing set off of losses of amalgamating company (M/s.Tulip Apparel) against the profits of assessee amalgamated company amounting to Rs. 31.26 crores when the assessee has not substantiated the genuineness business purpose of amalgamation when the amalgamation was approved by the transferee company on 31-01-2009 and the effect of amalgamation was from 31-03-2008 and recorded a perverse finding? (ii) Whether the Appellate Authorities were correct in holding that the set off of losses is permissible when both the companies have claimed the set off of same losses in their respective returns amounting to double c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee was allowed. 3. The revenue thereupon filed an appeal before the Income Tax Appellate Tribunal (hereinafter referred to as 'the Tribunal' for short). The Tribunal by an order dated 31.07.2012 inter alia held that amalgamation takes effect from the appointed day as mentioned in the scheme of amalgamation. It was further held that finding of the Assessing Officer that scheme of amalgamation is a device to avoid taxes is without any basis and is in the realm of surmises and conjectures. It was held that the amalgamation is deemed to have been effected on 31.03.2008 and therefore, the claim of the assessee for set off is required to be allowed. Accordingly, the appeal preferred by the revenue was dismissed. In the afor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectors dated 11.03.2008. It is also pointed out that information with regard to amalgamation was given to Bombay Stock Exchange Limited as well as National Stock Exchange Limited on 12.03.2008. It is also pointed out that the scheme approved by this court mentions the appointed date as 31.03.2008, which has to be accepted as date of amalgamation. Learned counsel for the assessee has also referred to Section 230(5) of the Companies Act. It is also argued that there is no non compliance with provisions of Section 72A(2)(b)(iii) of the Act. In support of aforesaid submissions, reliance has been placed on decisions in 'ENGINEERING INDS. LTD. VS. DEPUTY COMMISSIONER OF INCOME TAX', (2013) 218 TAXMAN 0259 (KARNATAKA), 'MARSHALL SONS & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. (2) Notwithstanding anything contained in sub-section (1), the accumulated loss shall not be set off or carried forward and the unabsorbed depreciation shall not be allowed in the assessment of the amalgamated company unless-- (a ) the amalgamating company-- (i) has been engaged 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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