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TMI Blog2023 (9) TMI 1079X X X X Extracts X X X X X X X X Extracts X X X X ..... Scheme of Arrangement and post effect of arrangements but the assessee claimed to have incurred loss to the extent of without any change in ownership HELD THAT:- The entire quarrel revolves around the wrong interpretation done by the AO in respect of Section 2. AO has grossly erred in taking effective date as 01.04.2014 instead of 01.04.2015, which means that the entire findings of the Assessing Officer are the result of erroneous understanding of the order of the Hon'ble High Court of Allahabad. It was only EPC business of the assessee and MBPL transferred to BESPL by way of slump sale effective from 01.04.2014 and MBPL and EIL amalgamated with the assessee effective from 01.04.2015 which is F.Y. 2015-16 relevant to A.Y 2016-17, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. The assessee is engaged in the business of generation of electricity through wind turbine generators. The assessee company was primarily engaged in the business of providing services relating to designing and manufacturing. The assessee entered into a Scheme of Arrangement u/s 391 to 394 of the Companies Act, 1956. The scheme was entered into between the following entities: a) BSBK Engineers Pvt Ltd [BEPL], the assessee b) Macawber Beekay Pvt Ltd [MBPL] c) BSBK Enviro Systems Pvt Ltd [BESPL] d) Ecopulse Infra Limited [EIL] 5. This Scheme of Arrangement was two-fold: (i) EPC business of the assessee company and then MBPL were transferred to BESPL on a going concern basis, by way of slump sale w.e.f 01.04.2014. (ii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l ownership rests with the share holders of the company and even after affecting the Scheme of Arrangement, real ownership remained with the assessee as the company BESPL became subsidiary of the holding company, which is the assessee, and there is no change in ownership of net assets prior to taking effect of the Scheme of Arrangement and post effect of arrangements but the assessee claimed to have incurred loss to the extent of Rs. 7.50 crores without any change in ownership. 11. The Assessing Officer was of the opinion that on paper, net assets were transferred and had changed hands, but in effect, no real change in the ownership has taken place in any commercial sense and the real ownership remained with the assessee company and went ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... qualification and financial qualification (i.e. the net worth) presently residing in different entities and enable the Transferee Company to compete and bid for new and bigger projects more competitively and effectively with the combined credentials, experience and track record of the companies (i.e. technical pre-qualification) and stronger financial qualification; (iv) As the EPC businesses of all the three companies will be integrated, it will lead to better utilization of assets, infrastructure and resources presently residing in three different companies and result in more economic and efficient management, control and running of the businesses of the companies concerned, and will lead to advantages of economies of scale and fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cern basis and vesting of the same with the Transferee Company, M/s. BSBK Enviro Systems Pvt. Ltd. which shall be effective from 01/04/2014. ii) Section Il, which provides for the merger of the company, M/s. Macawber Beekay Private Limited and the company, M/s. Ecopulse Infra Limited with the assessee company (M/s BSBK Engineers Private Limited) which shall become effective from 01/04/2015, i.e. after coming into effect of Section I. It may be noted here that pursuant to the scheme becoming effective (i.e. when the erstwhile amalgamating company, Ms. Macawber Beekay Private Limited cease to exist post Effective Date), the name of M/s. BSBK Enviro Systems Private Limited shall be changed to Macawber Beekay Private Limited 16. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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