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3. First ground of appeal relates to the action of the Assessing Officer for assessing the income of M/s. Indofil Chemicals Ltd. with the income of the assessee on protective basis. Assessee had claimed M/s Indofil Chemicals Ltd. had been amalgamated with it from 1-7-1982. However, the Assessing Officer held that necessary formalities not having been completed during the year under appeal, the income of the amalgamated company was to be assessed separately. Since assessee had disclosed the income of Indofil Chemicals as its income, the Assessing Officer assessed the same on protective basis. The Assessing Officer also declined to allow deduction on account of advance-tax and TDS amounting to Rs. 65,10,495 paid in the name of Indofil Chemicals Ltd. CIT(A) has confirmed the action of the Assessing Officer. The relevant facts relating to this issue are that on 16th September, 1982, the Board of Directors of Modipon Ltd., ie., the appellant passed a resolution for the merger of Indofil Chemicals Ltd. into this company subject to (i) the approval of shareholders at the General Meeting; (ii) the High Courts of Allahabad and Bombay; (iii) the Controller of Capital Issues; (iv) the Central Government under the Monopolies and Restrictive Trade Practices Act; and (v) Approval of any such governmental or other authorities as may be required. The said resolution was passed Under Section 391 and 394 of the Companies Act, 1956. By virtue of this resolution the appointed date for the purpose of effecting the merger and for valuation of shares of both Indofil and the assessee-company was declared to be 1st July, 1982. The Ministry of Industry and Company Affairs approved the claim of amalgamation of IFCL with MPL vide letter dated 17-1-1985. The Bombay High Court approved the claim of amalgamation of IFCL with MPL w.e.f. 1 -7-1982 vide their order dated 16-9-1985. The Allahabad High Court approved the amalgamation of IFCL with MPL w.e.f. 1-7-1982 vide order dated 9-7-1985. The Controller of Capital Issues gave his consent to the issue of share of MPL to the erstwhile equity shareholders to IFCL vide letter dated 19-11-1985. According to the Assessing Officer since all the formalities regarding the amalgamation of the IFCL with MPL had not been completed by 30th June, 1985 which is the last day of the previous year for the assessment year 1986-87, the merger of IFCL with MPL could not be said to have been completed. This view has been confirmed by the CIT(A).

4. It was contended before us that all the formalities regarding the amalgamation of IFCL with MPL were admittedly completed by the end of March 1986. However, the scheme of amalgamation was approved by the Bombay and Allahabad High Courts after the requisite Government approvals were received. The orders of the Bombay High Court and Allahabad High Court clearly indicate the date of amalgamation from the appointed date which is 1st July, 1982. The first year in which two companies stand amalgamated was the previous year ended on 30th July, 1983, ie., relevant to assessmer v ear 1984-85. Reliance was placed on the decision of the Bombay High Court in the case of CIT v. Swastik Rubber Products Ltd. [1983] 140 ITR 304 in support of the contention that the appointed date is the date on which the amalgamation takes place and the business of the amalgamated company is deemed to have been carried on by the transferee from that date. It was further brought to our notice that Assessing Officer had issued notices under Section 148 for assessment years 1984-85 and 1985-86 as also for the year under appeal in the name of M/s. Indofil Chemicals Ltd. to the Modipon Ltd. as their successor requiring to file the returns of income of M/s IFCL. The Delhi High Court has granted the stay against the said notices. It was accordingly prayed that assessment of the income of M/s Indofil Chemicals Ltd. in the hands of the assessee may be held to be on substantive basis and deduction of tax paid/recovered in the name of IFCL be allowed to be adjusted against the demand of the assessee.