The fact noted by the Tribunal are that GBDFC merged with the assessee-company with appointed date effective from 1st Jan., 2003 pursuant to the order of the High Court approving the scheme of amalgamation. The assessee had filed petition before the High Court seeking approval of the scheme of amalgamation of GBDFC only on 15th Jan., 2003, which is much later the date of slump sale of IP undertaking by GBDFC to AP. The Tribunal thus, held that the primary argument of the Departmental Representative that amalgamation process was already initiated prior to the date of slump sale on 1st Nov., 2002 is factually incorrect. Once the scheme of merger was duly approved by the High Court having in mind the larger public interest, the same cannot be disturbed by the Revenue by merely alleging that the merger was done only to buy losses and it was a colourable device. IT Department has not filed any objections before the High Court objecting to the merger. Hence, the Department cannot object to the same while implementing the order of merger. The fact that the High Court has accorded sanction to the scheme of amalgamation implies that the same has been done by considering the ‘presentations from various fields and by duly considering the tax evasion point for income-tax purposes. Further, assessee has fulfilled all the three conditions stipulated in S. 72A(2) cumulatively and also the requirement stipulated in rule 9C. Assessee has duly specified the commercial rationale behind the merger of GBDFC i.e., complete revival of GBDFC. Said intention behind the merger stands ratified and strengthened by the subsequent act of the assessee by fully utilising the resources of GBDFC. Therefore, CIT(A) rightly directed the AO to allow set-off of losses of amalgamating company in the hands of the assessee. (AY. 2003-04)