Photo of Akshara Shukla

Associate in the Tax Practice at the New Delhi office of Cyril Amarchand Mangaldas. Akshara specializes in providing advisory services on various aspects of direct tax viz. international taxation and corporate taxation. She can be reached at akshara.shukla@cyrilshroff.com

Primacy of family settlements upheld

Family settlements and ensuing documentation have been a subject matter of litigation for various reasons. One such litigious issue is whether the documents pertaining to family settlements are required to be registered under the Registration Act, 1908 (“Act”). If a document, which was otherwise required to be compulsorily registered, has not been registered, then as per Section 49 of the Act, such document would not affect any immovable property comprised therein, or confer any power to adopt, or be received as an admissible evidence of any transaction recorded in the document. The consequential issue that has evolved is whether the documents recording family arrangements are required to be registered. Recently, the Supreme Court (“SC”), in the case of Ravinder Kaur Grewal & Others. v. Manjit Kaur & Ors.,[1] has held that a memorandum of family settlement, which merely records the terms of a family settlement already acted upon by the concerned parties, is not required to be registered.
Continue Reading Primacy of Family Settlements Upheld

“Heads I win, tails you lose” approach of tax authorities rejected by Kolkata ITAT bench

In its recent ruling[1], Kolkata bench of Income Tax Appellate Tribunal (“ITAT”) rejected the retrospective application of General Anti-Avoidance Rule (“GAAR”) on a scheme of amalgamation approved by the Punjab & Haryana High Court (“HC”) and Delhi HC.

Background

M/s. JCT Limited (“Assessee”) is a public limited company, engaged in the business of manufacturing, sale and export of textiles, nylon and different varieties of yarns. M/s Gupta and Syal Ltd. (“Subsidiary”) was a wholly-owned subsidiary of the Assessee. During Assessment Year (“AY”) 2011-12, the business of the Subsidiary was amalgamated with the Assessee by a scheme of amalgamation approved by the Punjab & Haryana HC as well as the Delhi HC. Prior to the amalgamation, the Subsidiary had no substantial business activity and the only income earned by the Subsidiary in that financial year was in the nature of rent and receipts from sale of a land. Upon amalgamation, the long-term capital gains (“LTCG”) from the sale of land of the Subsidiary were set off against the losses and unabsorbed depreciation of the Assessee for AY2011-12.
Continue Reading “Heads I win, tails you lose” approach of tax authorities rejected by Kolkata ITAT bench