“transferee company”
The decision most relied on for transferee company is Spice Infotainment Ltd. v. CIT (247 CTR 500), cited in 114 judgments on BharatTax.
Leading authorities on transferee company
An assessment framed in the name of a company that has ceased to exist due to amalgamation is invalid, even if the amalgamated company participated in the proceedings. Such a defect cannot be cured under section 292B of the Income-tax Act.
A non-compete fee paid as part of a business acquisition or transaction constitutes an intangible asset, eligible for depreciation under Section 32(1)(ii) of the Income-tax Act.
Depreciation is allowable on goodwill as an intangible asset under Section 32(1)(ii) when it arises from a scheme of amalgamation or similar corporate restructuring.
In cases of amalgamation, the computation of income should be done with reference to periods before and after the appointed day, not the date of court sanction. Amalgamating companies cease to exist in law upon amalgamation.
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.
An assessment framed in the name of a company that no longer exists due to amalgamation is a nullity and cannot be cured by Section 292B. The assessment proceedings are void if notice is not issued to the transferee company.
