Slump Sale or Demerger? – A Better Tax Efficient Business Reconstruction Tool

  • Esakki Ammal K
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  • Esakki Ammal K

    Research Scholar at The Tamilnadu Dr.Ambedkar Law University, Chennai, India.

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Abstract

After the amendment of Income-tax Act of 1961, the provisions have changed drastically. Most of which are driven by novel techniques employed by tax counsels and upheld/approved by appellate authorities. Even after such amendment, tax counsels backed by clients continue to employ tax methods that are not approved by the tax authorities, resulting in a litigation and, in most cases, law changes to help the tax authorities win the battle. Setting court decisions aside is often one-sided. Of fact, in unusual circumstances, despite being in their favour, certain legal rulings perplex taxpayers and other stakeholders. Rattha Citadines Boulevard Chennai (P.) Ltd v. Dy. CIT is an instance of such a ruling. In Sesa Goa Ltd v. Jt. CIT , the court made several smart findings, such as comparing the Income-tax Act, 1922 with the Income-tax Act, 1961 when it was first passed. This article analyses the tax benefits provided on slump sales vs demergers, taking into account the Finance Act of 2021's latest modifications.

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Research Paper

Information

International Journal of Law Management and Humanities, Volume 5, Issue 1, Page 583 - 590

DOI: https://doij.org/10.10000/IJLMH.112560

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This is an Open Access article, distributed under the terms of the Creative Commons Attribution -NonCommercial 4.0 International (CC BY-NC 4.0) (https://creativecommons.org/licenses/by-nc/4.0/), which permits remixing, adapting, and building upon the work for non-commercial use, provided the original work is properly cited.

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Copyright © IJLMH 2021