The NCLT recently refused to sanction a scheme of amalgamation and arrangement between two companies which had common promoters following objection by the income tax department that the scheme was a device to avoid tax and amounted to an impermissible avoidance agreement.
It also held that the scheme was not in conformity with SEBI Takeover Guidelines and was not in public interest.
This case is one of the first wherein the department has cited provisions of GAAR and questioned commercial substance of the transaction.
Lakshmikumaran & Sridharan is organizing this conference call to analyze the issues raised by the income tax department and to understand implications under income tax law as well as corporate laws on the scheme of amalgamation.