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“demerger”

Mergers & RestructuringSection 2(19AA)Section 2(19AA)492 judgments

The decision most relied on for demerger is CIT v. Sonata Software Ltd. (21 Taxmann.com 23), cited in 54 judgments on BharatTax.

Leading authorities on demerger

CIT v. Sonata Software Ltd.
21 Taxmann.com 23 · 2012 · High Court
54
citing judgments

The case clarifies the negative conditions for Section 10A exemption, requiring an industrial undertaking not be formed by splitting up an existing business or using previously used machinery. It also establishes that tax benefits under provisions like Section 80J and 80IA attach to the undertaking itself, allowing successor entities to claim the unexpired benefit period.

CIT v. Micra India (P) Ltd.
231 Taxmann 809 · 2015 · High Court
42
citing judgments

An assessment order passed against a transferor company that has ceased to exist due to amalgamation or demerger is non est in the eyes of law and void, as this constitutes a jurisdictional error not curable under Section 292B of the Income-tax Act.

Electrocast Sales India Ltd. v. DCIT
170 ITD 507 · 2018 · ITAT
30
citing judgments

A scheme of amalgamation or demerger approved by the High Court, having considered public interest, cannot be disturbed by the revenue authorities solely on the ground that the assessee is not entitled to certain benefits like those under Section 72A of the Income Tax Act.

8.Ace Multi Axes System Ltd. v. Deputy Commissioner of Income Tax
367 ITR 266 · 2014 · High Court
26
citing judgments

The eligibility for deductions under sections 80-IB and 80-IA, and related issues like the initial assessment year, demerger, and resulting company status, are significant considerations in the context of company restructuring and tax benefits.

Rustagi Engineering Udyog (P.) Ltd. v. Deputy Commissioner of Income-tax
382 ITR 443 · 2016 · High Court
25
citing judgments

An amalgamation that has been brought to the notice of the Assessing Officer is void ab initio, meaning it is invalid from the beginning.

Dalmia Power Ltd. v. ACIT
420 ITR 339 · 2020 · Supreme Court
21
citing judgments

Once a scheme of arrangement or amalgamation has been sanctioned by a competent court and due notice has been issued to the income tax department, the binding nature of the scheme cannot be challenged during its implementation, as it attains statutory force.

EID Parry India's v. CIT
23 Taxmann.com 348 · 2012 · High Court
20
citing judgments

Unabsorbed depreciation of an amalgamating company cannot be added to the written down value of assets in the hands of the amalgamated company. The Supreme Court has dismissed a special leave petition against a High Court decision on this point, implicitly upholding this proposition.

Premji Khimraj Shah v. ITO
118 ITR 216 · 1979 · Reported
11
citing judgments

Succession to business requires the successor to take over the whole or substantially the whole of the predecessor's business and continue it. A successor to only a part of the business, resulting from disintegration, is not considered a successor to the original business.

Judgments citing demerger

Jt. CIT (Ods) - CC -1(4), Mumbai vs. Ultratech Cement Ltd., Mumbai

In the result, appeal filed by the revenue is dismissed

ITA 222/MUM/2022[2014-15]Status: DisposedITAT Mumbai28 Jun 2023AY 2014-15

Bench: Shri S. Rifaur Rahman, Hon'Ble & Shri Sandeep Singh Karhail, Hon’Bledeputy Commissioner Of Income Tax V. M/S. Ultratech Cement Ltd., Central Circle- 1(4) Ahura Centre, B- Wing Room No. 902, 9Th Floor 2Nd Floor, Mahakali Caves Road Pratishtha Bhavan, Old C.G.O. Bldg, (Annexe) Andheri (E), Mumbai- 400093 M.K. Road, Mumbai- 400020 Pan: Aaacl6442L (Appellant) (Respondent) Jt. Commissioner Of Income Tax (Osd) V. M/S. Ultratech Cement Ltd. Central Circle- 1(4) Ahura Centre, B- Wing Room No. 902, 9Th Floor 2Nd Floor, Mahakali Caves Road Pratishtha Bhavan Andheri (E), Mumbai- 400093 Old C.G.O. Bldg, (Annexe) M.K. Road, Mumbai- 400020 Pan: Aaacl6442L (Appellant) (Respondent) & M/S. Ultratech Cement Limited V. Dcit, Central Circle- 1(4) [Acit, Cc] Room. No 902, 9Th Floor Ahura Centre, B-Wing, 2Nd Floor Pratishtha Bhavan Mahakali Caves Road Old C.G.O. Bldg, (Annexe) Andheri (E), Mumbai- 400093 Maharishi Karve Road Mumbai- 400020 Pan: Aaacl6442L (Appellant) (Respondent)

Section 143(3)Section 35D

expenses claimed as allowable u/s 35DD of the Act, are inclusive of the expenses incurred by M/s SCL for the purpose of its demerger from M/s GIL Therefore, the assessee's claim of deduction to the extent of Rs.27,05,29,884/- is not correct and accordingly not allowable u/s35DD ... following two reasons: iii) The expenses to the tune of Rs.27,05,29,884/- (being 1/5 of the demerger expenses) were incurred by M/s SCL Page No. 6 ITA NO. 1789 & 1466/MUM/2021 (A.Y: 2013-14) ITA NO. 222 & 220/MUM/2022 (A.Y: 2014-15) M/s UltraTech Cement Limited iv) The said expenses

Ultra Tech Cement Limited, Mumbai vs. ACIT- CC 1(4), Mumbai

In the result, appeal filed by the revenue is dismissed

ITA 220/MUM/2022[2014-15]Status: DisposedITAT Mumbai28 Jun 2023AY 2014-15

Bench: Shri S. Rifaur Rahman, Hon'Ble & Shri Sandeep Singh Karhail, Hon’Bledeputy Commissioner Of Income Tax V. M/S. Ultratech Cement Ltd., Central Circle- 1(4) Ahura Centre, B- Wing Room No. 902, 9Th Floor 2Nd Floor, Mahakali Caves Road Pratishtha Bhavan, Old C.G.O. Bldg, (Annexe) Andheri (E), Mumbai- 400093 M.K. Road, Mumbai- 400020 Pan: Aaacl6442L (Appellant) (Respondent) Jt. Commissioner Of Income Tax (Osd) V. M/S. Ultratech Cement Ltd. Central Circle- 1(4) Ahura Centre, B- Wing Room No. 902, 9Th Floor 2Nd Floor, Mahakali Caves Road Pratishtha Bhavan Andheri (E), Mumbai- 400093 Old C.G.O. Bldg, (Annexe) M.K. Road, Mumbai- 400020 Pan: Aaacl6442L (Appellant) (Respondent) & M/S. Ultratech Cement Limited V. Dcit, Central Circle- 1(4) [Acit, Cc] Room. No 902, 9Th Floor Ahura Centre, B-Wing, 2Nd Floor Pratishtha Bhavan Mahakali Caves Road Old C.G.O. Bldg, (Annexe) Andheri (E), Mumbai- 400093 Maharishi Karve Road Mumbai- 400020 Pan: Aaacl6442L (Appellant) (Respondent)

Section 143(3)Section 35D

expenses claimed as allowable u/s 35DD of the Act, are inclusive of the expenses incurred by M/s SCL for the purpose of its demerger from M/s GIL Therefore, the assessee's claim of deduction to the extent of Rs.27,05,29,884/- is not correct and accordingly not allowable u/s35DD ... following two reasons: iii) The expenses to the tune of Rs.27,05,29,884/- (being 1/5 of the demerger expenses) were incurred by M/s SCL Page No. 6 ITA NO. 1789 & 1466/MUM/2021 (A.Y: 2013-14) ITA NO. 222 & 220/MUM/2022 (A.Y: 2014-15) M/s UltraTech Cement Limited iv) The said expenses

DCIT Cir 1(4), Mumbai vs. M/S. Ultratech Cement Ltd, Mumbai

In the result, appeal filed by the revenue is dismissed

ITA 1789/MUM/2021[2013-14]Status: DisposedITAT Mumbai28 Jun 2023AY 2013-14

Bench: Shri S. Rifaur Rahman, Hon'Ble & Shri Sandeep Singh Karhail, Hon’Bledeputy Commissioner Of Income Tax V. M/S. Ultratech Cement Ltd., Central Circle- 1(4) Ahura Centre, B- Wing Room No. 902, 9Th Floor 2Nd Floor, Mahakali Caves Road Pratishtha Bhavan, Old C.G.O. Bldg, (Annexe) Andheri (E), Mumbai- 400093 M.K. Road, Mumbai- 400020 Pan: Aaacl6442L (Appellant) (Respondent) Jt. Commissioner Of Income Tax (Osd) V. M/S. Ultratech Cement Ltd. Central Circle- 1(4) Ahura Centre, B- Wing Room No. 902, 9Th Floor 2Nd Floor, Mahakali Caves Road Pratishtha Bhavan Andheri (E), Mumbai- 400093 Old C.G.O. Bldg, (Annexe) M.K. Road, Mumbai- 400020 Pan: Aaacl6442L (Appellant) (Respondent) & M/S. Ultratech Cement Limited V. Dcit, Central Circle- 1(4) [Acit, Cc] Room. No 902, 9Th Floor Ahura Centre, B-Wing, 2Nd Floor Pratishtha Bhavan Mahakali Caves Road Old C.G.O. Bldg, (Annexe) Andheri (E), Mumbai- 400093 Maharishi Karve Road Mumbai- 400020 Pan: Aaacl6442L (Appellant) (Respondent)

Section 143(3)Section 35D

expenses claimed as allowable u/s 35DD of the Act, are inclusive of the expenses incurred by M/s SCL for the purpose of its demerger from M/s GIL Therefore, the assessee's claim of deduction to the extent of Rs.27,05,29,884/- is not correct and accordingly not allowable u/s35DD ... following two reasons: iii) The expenses to the tune of Rs.27,05,29,884/- (being 1/5 of the demerger expenses) were incurred by M/s SCL Page No. 6 ITA NO. 1789 & 1466/MUM/2021 (A.Y: 2013-14) ITA NO. 222 & 220/MUM/2022 (A.Y: 2014-15) M/s UltraTech Cement Limited iv) The said expenses

M/S. Ultratech Cement Ltd, Mumbai vs. DCIT Cent Cir-1(4), Mumbai

In the result, appeal filed by the revenue is dismissed

ITA 1466/MUM/2021[2013-14]Status: DisposedITAT Mumbai28 Jun 2023AY 2013-14

Bench: Shri S. Rifaur Rahman, Hon'Ble & Shri Sandeep Singh Karhail, Hon’Bledeputy Commissioner Of Income Tax V. M/S. Ultratech Cement Ltd., Central Circle- 1(4) Ahura Centre, B- Wing Room No. 902, 9Th Floor 2Nd Floor, Mahakali Caves Road Pratishtha Bhavan, Old C.G.O. Bldg, (Annexe) Andheri (E), Mumbai- 400093 M.K. Road, Mumbai- 400020 Pan: Aaacl6442L (Appellant) (Respondent) Jt. Commissioner Of Income Tax (Osd) V. M/S. Ultratech Cement Ltd. Central Circle- 1(4) Ahura Centre, B- Wing Room No. 902, 9Th Floor 2Nd Floor, Mahakali Caves Road Pratishtha Bhavan Andheri (E), Mumbai- 400093 Old C.G.O. Bldg, (Annexe) M.K. Road, Mumbai- 400020 Pan: Aaacl6442L (Appellant) (Respondent) & M/S. Ultratech Cement Limited V. Dcit, Central Circle- 1(4) [Acit, Cc] Room. No 902, 9Th Floor Ahura Centre, B-Wing, 2Nd Floor Pratishtha Bhavan Mahakali Caves Road Old C.G.O. Bldg, (Annexe) Andheri (E), Mumbai- 400093 Maharishi Karve Road Mumbai- 400020 Pan: Aaacl6442L (Appellant) (Respondent)

Section 143(3)Section 35D

expenses claimed as allowable u/s 35DD of the Act, are inclusive of the expenses incurred by M/s SCL for the purpose of its demerger from M/s GIL Therefore, the assessee's claim of deduction to the extent of Rs.27,05,29,884/- is not correct and accordingly not allowable u/s35DD ... following two reasons: iii) The expenses to the tune of Rs.27,05,29,884/- (being 1/5 of the demerger expenses) were incurred by M/s SCL Page No. 6 ITA NO. 1789 & 1466/MUM/2021 (A.Y: 2013-14) ITA NO. 222 & 220/MUM/2022 (A.Y: 2014-15) M/s UltraTech Cement Limited iv) The said expenses

Ppg Coating India P. Ltd, Mumbai vs. DCIT Cir 13(1)(1), Mumbai

In the result, the appeal of the assessee is allowed

ITA 2168/MUM/2017[2012-13]Status: DisposedITAT Mumbai16 Jun 2023AY 2012-13

Bench: Shri Aby T. Varkey, Jm & Shri Amarjit Singh, Am आयकर अपील सं/ I.T.A. (Tp) No.2168/Mum/2017 (निर्धारण वर्ा / Assessment Year: 2012-13) Ppg Coatings India Pvt. बिधम/ Dcit, Circle-13(1)(1) Ltd. Mumbai Vs. (Now Merged With Ppg Asian Paints Pvt. Ltd.) The Centrium Phoenix Market City, Lbs, Marg, Kurla West, Mumbai- 400070. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Aabcs4378K (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: Shri Percy Pardiwala Revenue By: Shri Samuel Pitta (Sr. Ar) सुनवाई की तारीख / Date Of Hearing: 02/05/2023 घोषणा की तारीख /Date Of Pronouncement: 16/06/2023 आदेश / O R D E R Per Aby T. Varkey, Jm: This Is An Appeal Preferred By The Assessee Against The Order Of The Assessing Officer Dated 25.01.2017 Pursuant To Dispute Resolution Panel (Drp)-02, Mumbai Passed 27.12.2016 Passed U/S 143(3) R.W.S. 144C(13) Of The Income Tax Act, 1961 (Hereinafter “The Act”). 2. At The Outset, The Ld. Senior Counsel For The Assessee Drew Our Attention To The Additional Grounds Of Appeal Raised By The Assessee, Which According To Him Is A Legal Issue & Which Need To Be Adjudicated First, Since If The Legal Issue Is Upheld Then, It Goes To The Root Of The Jurisdiction Of The Ao To Have Passed The Final Assessment Order. The Legal Issue Raised By Assessee Reads As Under;-

For Appellant: Shri Percy PardiwalaFor Respondent: Shri Samuel Pitta (Sr. AR)
Section 143(3)Section 92C

order dated 06 July 2012 passed by the Hon’ble Bombay High Court sanctioning the composite scheme of arrangement for merger and demerger, to form ‘Asian PPG Industries Ltd,’ w.e.f. 01 August 2012 (which name was changed to ‘PPG Asian Paints Pvt. Ltd. w.e.f. 18 September 2012), thereby vitiating ... No.2168/Mum/2017 A.Y. 2012-13 M/s. PPG Coatings India Pvt. Ltd. the Hon’ble Bombay High Court sanctioning the composite scheme of arrangement for merger & demerger, to form ‘Asian PPG Industries Ltd.’ w.e.f. 01.08.2012 (which name was subsequently changed to ‘M/s. PPG Asian Paints Pvt. Ltd.’ w.e.f. 18.09.2012). Even though