Issue of shares at face value to the Shareholders of the Amalgamating Company pursuant to a Scheme of Amalgamation to not attract rigours of Section 56(2)(viib) of the ITA

The Hon’ble Ahmedabad ITAT in its recent ruling1 has held that issuance of shares at face value by the Amalgamated Company to the shareholders of the Amalgamating Company, representing the consideration for net assets (i.e. excess of assets over liabilities) vested pursuant to a Scheme of Amalgamation will not trigger any implications under Section 56(2)(viib) of the ITA.
RBSA Advisors - Thumbanil 562viib in case of amalgamation Website Inside 2

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