EASTERN DOOARS TEA CO LTD Vs. INCOME TAX OFFICER
INCOME TAX APPELLATE TRIBUNAL
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Anand Prakash, Accountant Member -
(1.) THIS appeal is directed against the order of the Commissioner under Section 263 of the Income-tax Act, 1961 ('the Act'), in respect of the assessment year 1977-78, holding that the order of the ITO allowing carry forward of business loss and unabsorbed depreciation of Rs. 1,15,126 to the assessee-company was erroneous and prejudicial to the interests of the revenue and directing him to withdraw the said benefit allowed to the assessee and increase the total income of the assessee for the aforesaid assessment year by the corresponding amount so that it will ultimately stand assessed at Rs. 1,70,274.
(2.) The circumstances in which the Commissioner interfered with the order of the ITO may be noted. Sidley Dooars Tea Co. Ltd. and Eastern Dooars Tea Co. Ltd. evolved a scheme of amalgamation of the former company with the latter and, accordingly, the shareholders of the two companies passed resolutions. The scheme formulated for amalgamation between the two companies was ultimately put up for the approval of the Hon'ble High Court of Calcutta who vide their order dated 21-12-1976 approved the scheme of amalgamation as proposed. The scheme in question was held by their Lordships to be binding with effect from 1-1-1976. The relevant part of the High Court's order may be extracted at this stage for ready reference as follows :
1. That all the properties, rights and powers of the said transferor company specified in the first, second and third parts of the Schedule B hereto and all the other properties, rights and powers of the said transferor company be transferred without further act or deed to the said transferee company and, accordingly, the same shall pursuant to Section 394(2) of the Companies Act, 1956, be transferred to and vest in the transferee company for all the estate and interest of the transferor company but subject nevertheless to all charges now affecting the same and
2. That all the liabilities and duties of the said transferor company be transferred without further act or deed to the said transferee company and, accordingly, the same shall pursuant to Section 394(2) of the Companies Act, 1956, be transferred to and become the liabilities and duties of the said transferee company and
That all proceedings and/or suits and/or appeals now pending by or against the said transferor company be continued by or against the said transferee company and
(3.) THAT the said transferee company do allot to every shareholder and/or member of the said transferor company who shall require it to do so for Sub-divided equity shares of Rupees ten each fully paid-up in the said transferee company for every one equity share of Rupees fifty each fully paid-up and held by him/her/it in the said transferor company and;
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