Objection to Scheme of Arrangements on Taxation Grounds

Schemes of arrangement initiated under Sections 391-394 of the Companies Act are often being objected to by the Income Tax Authorities on the ground that such schemes are unearthed with the sole objective of non payment of taxes at the applicable rates.

Professor V. Umakanth, in a brilliant post in the Indian Corporate Law Blog, has explained the recent judicial trend towards the same.