| Citation(s) |
|---|
| 1998 SLG 26 1998 SLD 26 1998 PTD 180 (1997) 226 ITR 188 (1998) 78 TAX 371 |
Supreme Court of India
Civil Appeals Nos. 139 to 142 with 7 to 11 of 1980, decisiondated: 25th April,1997
S.C. AGRAWAL AND K. S. PARIPOORNAN, JJ
K.N. Shukla, Senior Advocate (B.K. Prasad, C. Radha Krishna and Anil Srivastava, Advocates with him) for Appellant (in Civil Appeals Nos. 139 to 142 of 1980 and for
Respondent in Civil Appeals Nos. 7 to 11 of 1980).T.A. Ramachandran and K.R. Ramamani, S
Civil Appeals Nos. 139 to 142 with 7 to 11 of 1980, decisiondated: 25th April,1997
S.C. AGRAWAL AND K. S. PARIPOORNAN, JJ
K.N. Shukla, Senior Advocate (B.K. Prasad, C. Radha Krishna and Anil Srivastava, Advocates with him) for Appellant (in Civil Appeals Nos. 139 to 142 of 1980 and for
Respondent in Civil Appeals Nos. 7 to 11 of 1980).T.A. Ramachandran and K.R. Ramamani, S
COMMISSIONER OF IncomE taxVsAMALGAMATIONS (PVT.) LTD
Law: Income Tax Act, 1961
Section: 37
(a) Income-tax-----Capital gains---Transaction to avoid or reduce tax on capital gains---Sale of shares necessitated by provision in Companies Act prohibiting inter-¬company loans---Price for shares fixed by Central Government---Proviso to S.12-B(2) of Indian Income-tax Act, 1922, was not applicable---Indian Income-tax Act, 1922, S.12-B---Indian Companies Act, 1956, 5.295. (b) Income-tax--- ---Business loss---Guarantee---Company---Memorandum of association authorising guaranteeing of loans---Guarantee for loans taken by subsidiary company---Subsidiary company going into liquidation---Loss deductible in year in which final payment was received from liquidator. (c) Income-tax--- ----Business expenditure---General principles---Expenditure must be incidental to business---Holding and subsidiary companies---Ceiling on remuneration to Directors fixed under Companies Act ---Assessee-company paying remuneration in excess of ceiling to Directors of subsidiary companies---No nexus between payment and business of assessee-company--¬Amounts paid were not deductible---Indian Income-tax Act, 1922, S.10(2)(xv)---Indian Income Tax Act, 1961, S. 37. The assessee-company held shares in several companies. As on July 1, 1956, a sum of Rs. 1,85,16,000 was due to S.G., a subsidiary of the assessee-company, from the assessee-company. Under section 295 of the Companies Act, 1956, which came into force on April 1,1956, no company could, without obtaining the previous approval of the Central Government in that behalf, directly or indirectly, make any loan to a company, which was its holding company. In subsection (3) of section 295 it was provided that where any loan made by a lending company and outstanding at the commencement of the Companies Act, 1956, could not have been made without the previous approval of the Central Government if that section had then been in force, then the lending company had, within six months from the commencement of the Act or such further time not exceeding six months as the Central Government might grant for that purpose, to either obtain the approval of the Central Government to the transaction or enforce the repayment of the loan made. The liability of…
Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492