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TMI Blog2019 (11) TMI 1488X X X X Extracts X X X X X X X X Extracts X X X X ..... requested that the Transferee Company be directed to file the returns under the IT Act prior to approval of the Scheme. The Petitioner Companies have complied with proviso to Section 230(7) /Section 232 (3) by filing the certificate of the Company's Auditor in relation to compliance with the Accounting Standards, the applicable Accounting Standards notified by the Central Government and Section 2(43) of the Companies Act, 2013 and the rules framed thereunder. Amalgamation scheme approved. In view of absence of any other objections having been placed on record before this Tribunal and since all the requisite statutory compliances having been fulfilled, this Tribunal sanctions the Scheme of Amalgamation annexed as Annexure 3 with the Company Petition as well as the prayer made therein - Scheme sanctioned. - CP/973, 974/CAA/2019 in CA/627 and 628/CAA/2019 - - - Dated:- 19-11-2019 - R. Varadharajan, Member (J) and Anil Kumar B., Member (T) For Appearing Parties : A.R. Ramanathan, M. Srinivasan, Varsha Balasubramanian and B. Palani, Authorized Representative ORDER R. Varadharajan, Member (J) 1. The present Company Petitions have been filed by the Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... served to (i) The Regional Director, Chennai, (ii) Registrar of Companies Coimbatore, (iii) Official Liquidator and (iv) Income Tax Department in compliance with the directions passed by this Tribunal and in proof of the same acknowledgements/receipts have also been enclosed. 5. The Managing Director of the Transferee Company has also filed an affidavit on 04.11.2019, to the effect that the proposed Scheme of Amalgamation does not fall under the definition of Combination as defined under Section 5 and 6 of the Competition Act, 2002 and as such it does not cause any appreciable adverse effect on competition and hence the proposed Scheme of Amalgamation does not require any regulation or clearance or approval from Competition Commission of India. 6. The Regional Director, (for brevity 'RD') Chennai to whom the notice was issued, has filed its Report on 06.09.2019 before this Tribunal and has stated that clause 7 of Part III of the Scheme of Companies provides for the protection of the interest of the employees/staff/executives/workmen of the Transferor Company. Further, the RD has observed in para 9 as follows; It is submitted that clause 11 of Part III of the S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ors or to the public, as per the provisions of the Companies Act, 1956/ Companies Act 2013, whichever is applicable. 10. The Chartered Accountant appointed by the Official Liquidator verified the books of accounts of the Transferor Company and in relation to the Share Exchange Ratio has held as follows; The net worth of the Transferor Company has gone negative since last three years. Therefore there cannot be any intrinsic value for the shares of the Transferor Company. However the Company has obtained report of valuation from B. Thiagarajan Co; Chartered Accountants, Chennai have considered various methods of valuation and concluded an exchange ratio of one equity shares of fully paid EJIL (Transferee Company) for 72 equity shares in EJRL (Transferor Company), both having the face value of ₹ 10/- per share. This arrangement is not detrimental to any of the share holders. 11. Further, the Department of Income Tax has also filed its report on 15.10.2019 and brought on record that the Transferee Company has not filed its Return of Income under Section 139(1) of the Income Tax Act, 1961 for AY's 2019 - 2020 and that the same is getting time barred on 30.11.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eme of Amalgamation, taking into consideration the clauses contained in the Scheme in relation to liability to tax and also as insisted upon by the Income Tax and in terms of the decision in RE: Vodafone Essar Gujarat Limited v. Department of Income Tax (2013) 353 ITR 222 (Guj) and the same being also affirmed by the Hon'ble Supreme Court and as reported in (2016) 66 taxmann.com.374(SC) from which it is seen that at the time of declining the SLPs filed by the revenue, however stating to the following effect vide its order dated April 15,2015 that the Department is entitled to take out appropriate proceedings for recovery of any statutorily dues from the transferor or transferee or any other person who is liable for payment of such tax dues the said protection be afforded is granted. With the above observations, the petition stands allowed and the scheme of amalgamation is sanctioned. THIS TRIBUNAL DO FURTHER ORDER: (i) That all properties, right and interest of the Amalgamating Companies shall pursuant to section 232 (3) of the Companies Act, 2013 without further act or deed be transferred to and vest in or be deemed to have been transferred and vested in the Tran ..... 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