Set off of capital loss and business loss of amalgamating companies denied to the amalgamated company by AO by invoking section 79. Same upheld by the CIT(A) u/s 72A. The Tribunal held that merger scheme was duly approved by High Court having in mind larger public interest. It cannot not be disturbed by revenue merely because assessee was not entitled for benefits under section 72A. Further, Department was also bound by the doctrine of acquiescence and estoppel as no objection was raised by the Department before the High Court and no further appeal was filed u/s 391(7) of the Companies Act, 1956 against order of amalgamation sanctioned by High Court. Held, therefore, even if the conditions of section 72A are not fulfilled, losses of amalgamating companies allowable for set off to the amalgamated company. (AY .2011-12)
Electrocast Sales India Ltd. v. Dy. CIT (2018) 64 ITR 14 (Kol.)(Trib.)
S. 79 : Carry forward and set off losses – Change in share holdings – Companies which public are not substantial interested – Amalgamation – Scheme of amalgamation approved by the High Court – Held, such scheme approved in public interest and cannot be disturbed by the Department merely because assessee was not eligible for the same u/s 72A – Held, doctrine of acquiescence and estoppel applicable – Held, capital loss and business loss of amalgamating companies available to the amalgamated company [S. 72A]