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Tribunal Denies Tax Neutrality to Demerger where Shares are Issued by Holding Company June 30, 2026
Published in: TaxBuzz
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We are pleased to share with you our latest TaxBuzz, analysing the recent decision of the Mumbai Bench of the Tribunal in Sterling Holiday Resorts Ltd. v. DCIT.
In this edition, we examine the Tribunal’s ruling that demerger would not qualify as a tax-neutral demerger under sections 2(19AA) and 2(41A) of the Income-tax Act, 1961 where the demerged undertaking is transferred to wholly owned subsidiary but the consideration is discharged through issuance of shares by its holding company.
We trust that you will find this Tax Alert informative and insightful. As always, we look forward to receiving your valuable feedback.
For any details and clarifications, please feel free to write to:
Ms. Poonita Harsh Kundra, Partner([email protected])
Mr. Aniket D Agrawal, Partner ([email protected])
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