Compliance of sec. 2(19AA) of Income Tax Act not mandatory for all schemes of amalgamation or arrangement

Advertisement In the present case, the observation of the Regional Director that the demerger and transfer of undertaking – III of the demerged company to the resulting company No. 2 would result in non-compliance of section 2(19AA) of the Income-tax Act, 1961, does not appear to be valid as the definition of ‘demerger’ under the Income-tax Act, 1961, would be relevant only for the limited purpose of ascertaining whether the demerger is tax neutral, or not, compliance of the said provision of law would be made for availing tax concessions and, thus, it cannot be read as a mand...