Senior Counsel S.E. Dastur and AZB successfully argued the Star Group amalgamation case worth Rs. 875 crore, before the AAR, which followed principles laid down in the McDowells and the Azadi Bachao Andolan cases..Senior Counsel S.E. Dastur, one of India’s foremost tax experts, successfully argued the Star Group amalgamation case before the Authority of Advance Rulings (AAR), providing comfort from capital gains liability to the global television network..AZB & Partners’ Delhi office, led by Partners Ajay Bahl and Sanjay Agarwal, with counsels Porus F. Kaka and Abhinav Ashwin. BMR & Associates’ Chartered Accountants, Frank D’souza and Jaideep S. Kulkarni, assisted Dastur in obtaining a favourable ruling from the AAR relating to the taxation of cross-border mergers. Counsels, T.N. Chopra and Shivendra Kumar Singh appeared for the IT Department before the bench comprising Justice P.V. Reddy and J. Khosla..Taxation relating to cross border transactions has traditionally been a thorn in the flesh for both corporate houses and the revenue department alike. In this case, the department held that proposed cross-border amalgamation of Star Group Limited with the Indian group company would be taxable in India. Rejecting the Income Tax department’s claim, and toeing the line established by well settled judicial precedents, including the McDowells and the Azadi Bachao Andolan cases, the AAR held that ‘no tax liability arises under the Income Tax Act in respect of the transfer of assets/shares pursuant to and as a part of the terms of amalgamation’. An adverse ruling before the AAR would have cost Star Group nearly Rs. 875 crore ($ 190 million) in capital gains tax liability..Nishith Desai Associates have, in an article published in VCCircle, explained the impact of the judgment. A copy of the Judgment is available here.
