Objective: A Company (H Ltd.) wants to Buy / sell a piece of land to Mr. X by avoiding stamp duty.
Strategy: 1.Have a Demerger and separate the land to S Ltd. 2.Purchase consideration - shares of S Ltd. to H Ltd. 3.S Ltd. becomes a 100% subsidiary of H Ltd. 4.Transfer the shares of S Ltd. to Mr. X from H Ltd.
Assumption: All the companies are private companies.
Advice required: 1. What are all the legal intricacies from Income Tax Act and Companies Act in this case 2. Is the strategy ok ?
Kindly suggest. thanks in advance
CAclubindia
