Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: ACCOUNTING STANDARD :: ACCOUNTING STANDARDS :: due date for vat payment :: articles on VAT and GST in India :: Central Excise rule to resale the machines to a new company :: ARTICLES ON INPUT TAX CREDIT IN VAT :: form 3cd :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: TAX RATES - GOODS TAXABLE @ 4% :: list of goods taxed at 4% :: TDS :: VAT RATES :: empanelment :: VAT Audit :: cpt
« News Headlines »
 India is moving towards a flawed GST
 ICAI to organise two-day international conference in Hyderabad
 Here's how to calculate tax payable on your capital gains
 Income Tax calculations for the financial year 2016-17
 CPE Events 17 October - 22 October 2016
 High Court raps I-T Department for wrong tax demand
  CBDT signs 5 advance pricing pacts with Indian taxpayers
 Finance ministry warns tax officials of action against GST protest
 Big changes for small units under GST
 Parliament’s winter session to begin on November 16 to expedite GST rollout
 Income-tax (27th Amendment) Rules, 2016 - 92/2016

HC plugs tax evasion leak in M&A formula
October, 16th 2006

Amalgamation of companies as a tax avoidance/evasion device is going to be difficult from now on, thanks to a recent order by the company court of the Bombay High Court. The order directs the regional director of the department of company affairs to inform the court of taxes payable by merging companies, namely income tax, sales tax, excise and customs duties.

Legal experts point out that this order will go a long way in putting an end to the practice employed by certain businessmen who avoid taxes by merging a profit-making company with the entities that made huge losses in their books.

Justice RS Mohite, presiding over the company court of the high court, directed that the regional director should ascertain that the statutory dues to the government are cleared by the company in question, before certifying that the amalgamation scheme is not prejudicial to the shareholders, creditors and the public at large.

The order was passed during the hearing of an amalgamation scheme filed by Pratibha Fabrics with Kamdar Fab. The court said the regional director should investigate and apply his mind before writing his report, as liability of a company may cease to exist along with its identity.

The court further observed that the regional director had been filing reports that looked exactly like computer printouts of earlier ones, mostly approving the amalgamation proposal after stating that he had vetted the report of registrar of companies (ROC), replies of the amalgamating firms and the relevant provisions of the Companies Act.

However, the companies proposing the merger scheme sought a review of the court order.During the hearing of the review petition, Beni Chatterji, the counsel for the central government, cited a Supreme Court order in the Mihir Mafatlal case.

The apex court had held earlier that amalgamation can be rejected on the ground of a tax fraud. Being informed of the tax dues is the only way for the court to verify whether the proposal for amalgamation is a genuine corporate exercise or a device to evade taxes due to the government.

The counsel for amalgamating companies, Virag Tulzapurkar argued that all schemes of amalgamation provide for shifting liabilities and there is no basis for the apprehension that government may lose taxes therefrom. The company court subsequently disposed of the review application.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Software Outsourcing Company Offshore Software Outsourcing Software Outsourcing Company India Offshore Outsourcing Company India Software BPO Software Business Process Outsourcing Software Outsourcing India Offsho

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions