Composite scheme of arrangement cannot be denied the tax benefits if all the conditions for amalgamation under the Income-tax Act are fulfilled

Recently, the Chennai bench of Income Tax Appellate Tribunal, in the case of ACIT Vs TVS Motors Co. Ltd. [2010] 36 DTR 89 (Chennai) held that, a composite scheme of arrangement cannot be denied the tax benefits if all the conditions for amalgamation under the Income Tax Act, 1961 (the Act) are fulfilled. Facts of the case TVS, an Indian company held 66.07 percentage share capital of Lakshmi Auto Components Ltd (LAC). Under a composite scheme of arrangement, the rubber and plastic divisions of LAC are transferred to Sundaram Auto Components Ltd. (SAC) with effect from (w.e.f.) 1 April 2003 and ...