Monday, 14 April 2014

CDBT Directive On Opposing Mergers/ Amalgamations/ De-Mergers


The CBDT has issued a letter dated 11.04.2014 pointing out that in a recent case, a scheme of amalgamation was designed to seek amalgamation with retrospective effect so as to claim set-off of losses of the amalgamated company with the profits of the amalgamating company. Though the department filed an intervention application in the High Court to object to the amalgamation, the same was dismissed on the ground that the department had no locus standi in the matter. The CBDT has stated that to avoid this situation again, the procedure prescribed in this behalf vide MCA’s Circular No. 1/2014 dated 15.01.2014 (pdf) for objecting to amalgamations etc which are prejudicial to the interests of the revenue should be followed.

No comments: