Section 43B
This query is : Resolved
19 August 2010
Company X had disallowed certain expenses in A.Y. 2009-10. During A.Y. 2010-2011, the business of company X was taken over by Company Y on slump sale basis. Whether Company Y can claim deduction of expenses earlier disallowed for Company X, on payment basis? Are there any related case laws?
Aditya Maheshwari
(Expert)
19 August 2010
When a company is takenover it is taken over along with its losses and so on similar logic the disallowances u/s 43B takien over should be allowable on payment basis though i dont know any case laws currently but if i get some i will update it here.
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Aditya Maheshwari
(Expert)
24 August 2010
Not directly related but somewhat near.
In S.R.F. LTD. vs. GARWARE PLASTICS & POLYESTERS LTD. & ORS (1995) 128 CTR (SC) 76 : (1995) 214 ITR 678 (SC) : (1995) 80 TAXMAN 102 by the Supreme court it was decided Company—Amalgamation of companies—Before finalising the merger scheme and approving its draft scheme for merger of the sick industrial company with a healthy company, notice should be given by the BIFR to the Central Government as well to the CBDT—However, both impleaded as parties before the High Court and the Supreme Court and their counsel stating that there would be no loss of revenue to the State and benefit of s. 43B is bound to be given to a company revived on either basis—Order of amalgamation does not warrant interference.
In S.R.F. LTD. vs. GARWARE PLASTICS & POLYESTERS LTD. & ORS (1995) 128 CTR (SC) 76 : (1995) 214 ITR 678 (SC) : (1995) 80 TAXMAN 102 by the Supreme court it was decided Company—Amalgamation of companies—Before finalising the merger scheme and approving its draft scheme for merger of the sick industrial company with a healthy company, notice should be given by the BIFR to the Central Government as well to the CBDT—However, both impleaded as parties before the High Court and the Supreme Court and their counsel stating that there would be no loss of revenue to the State and benefit of s. 43B is bound to be given to a company revived on either basis—Order of amalgamation does not warrant interference.
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