Scheme of Merger of WoS with its Holding Company Approved - Despite of Objections from IT Department
M & A Critique|April 2023
Yuflow Engineering (Private Limited Petitioner Company 1/Transferor Company) filed scheme of amalgamation with Yuken India Limited (Petitioner Company 2 Transferee Company”) before the Hon'ble National Company Law Tribunal (NCLT) Bengaluru (Bangalore) Bench.
Scheme of Merger of WoS with its Holding Company Approved - Despite of Objections from IT Department

Facts of the case:-

1. Transferor Company is a wholly owned subsidiary (WoS) company of Transferee Company.

2. The Transferee Company is a profit-making company whereas the Transferor Company has been a loss-making company for the last two financial years.

3. The Income Tax Department filed its report for the Transferee Company stating that there is no objection for Merger subject to compliance of section 79 of Income Tax Act and continuation of proceedings against Transferee Company.

4. Transferee Company gave an undertaking that the company undertakes to comply with provisions of Section 79 of Income Tax Act and continuation of proceedings in the name of the Transferee Company.

Coming to the Transferor Company, The Income Tax Department Filed its report for the Yuflow Engineering Private Limited (Transferor Company) citing certain observations and raising objections to the scheme as follows:

Points from report by the Income Tax Department

lt is observed by the Income Tax Department that from the Financials submitted along with scheme documents that Transferor Company is loss making company and Transferee Company is a profit-making company.

It is also observed from the Income Tax return filed by the Transferor Company for AY: 2021-22 that it is having total loss to be carried forward to future years to the tune of Rs.8,09,04,600/(Business Loss Rs.6,69,94,054/-.. and unabsorbed depreciation of Rs.1,39,10,546/-).

Therefore, it is evident that the scheme is for avoiding payment of tax by merging loss making and profit-making companies.

Esta historia es de la edición April 2023 de M & A Critique.

Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.

Esta historia es de la edición April 2023 de M & A Critique.

Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.

MÁS HISTORIAS DE M & A CRITIQUEVer todo
Raymond Group continues Segregation of its Business Verticals
M & A Critique

Raymond Group continues Segregation of its Business Verticals

After successful demerger of \"Lifestyle Business,\" Raymond Limited announced yet another restructuring to unlock further value for stakeholders.

time-read
3 minutos  |
August 2024
Ultratech Cements adds India Cement in its shopping cart
M & A Critique

Ultratech Cements adds India Cement in its shopping cart

India's Cement Industry is poised for consolidation. In recent past we have seen multiple large & small acquisitions in cement segment for consolidating positions.

time-read
3 minutos  |
August 2024
Valor Estate Limited: "Diversification" to "Sepration" of Hospitality Business
M & A Critique

Valor Estate Limited: "Diversification" to "Sepration" of Hospitality Business

“From investments in hospitality business, the demerger transaction will enable VEL to start its construction in hospitality”

time-read
4 minutos  |
August 2024
SIEMENS Energy to be a separate entity in alignment with global strategy
M & A Critique

SIEMENS Energy to be a separate entity in alignment with global strategy

Siemens AG announced its Vision 2020+ which included the spin-off of its Gas & Power [G&P) i.e., Energy Business into Siemens Energy.

time-read
5 minutos  |
June 2024
Arvind Group separates its Advanced Material Business for independent growth trajectory
M & A Critique

Arvind Group separates its Advanced Material Business for independent growth trajectory

Advanced Material Business (AMD) of Arvind Limited focuses on advanced materials and caters to customer needs across the textile value chain, including specialty yarns, fabrics, and ready-made products.

time-read
3 minutos  |
June 2024
Merger for bail-out from debt obligation
M & A Critique

Merger for bail-out from debt obligation

Ind Swift Limited (herein after also referred to as 'ISL' or 'Transferor Company') is engaged in the business of manufacturing of Pharmaceutical Products.

time-read
3 minutos  |
June 2024
Batliboi Ltd. merging its associate company
M & A Critique

Batliboi Ltd. merging its associate company

Batliboi Limited has a history of collaborations with various foreign technical partners and has subsidiaries like Hydraulic & General Engineers Ltd. and Batliboi International Ltd. In March 2024, the board of Directors of Batliboi Limited accorded their approval for the merger of promoter owned private company with itself.

time-read
2 minutos  |
May 2024
TVS Motors issuances of convertible preference shares as bonus instead of dividend
M & A Critique

TVS Motors issuances of convertible preference shares as bonus instead of dividend

Recently, well known auto manufacturer announced the issuance of preference shares as a bonus to all equity shareholders.

time-read
3 minutos  |
May 2024
Aditya Birla Fashion & Retails Scheme to undo its consolidation
M & A Critique

Aditya Birla Fashion & Retails Scheme to undo its consolidation

Corporate restructuring saga continues for Aditya Birla Group.

time-read
5 minutos  |
May 2024
Advent International to combine its listed & private entity business
M & A Critique

Advent International to combine its listed & private entity business

Recently, Advent International announced the merger of its privately held pharma company into recently acquired listed pharma company.

time-read
6 minutos  |
April 2024