Holding

Sanction of a scheme of amalgamation under Section 18 of the Sick Industrial Companies (Special Provisions) Act necessarily implies that the requirements of Section 72A of the Income Tax Act are met, and the BIFR must make the declaration under Section 72A.

Summary

Indian Shaving Products Ltd., the parent of the sick subsidiary Sharp Edge Ltd., obtained BIFR approval for an amalgamation scheme under the Sick Industrial Companies (Special Provisions) Act, 1985, but BIFR refused to grant the tax benefit under Section 72A of the Income Tax Act. The appellant challenged this refusal before the Supreme Court. The Court held that sanction of an amalgamation scheme under Section 18 of the Act necessarily satisfies the conditions laid down in Section 72A, namely that the amalgamating company is financially non‑viable and the amalgamation is in the public interest. Consequently, the BIFR is obliged to make the declaration contemplated by Section 72A. The appeal was allowed, the BIFR order declining the declaration was set aside, and the BIFR was directed to issue the declaration.

Issues considered

The sanction of an amalgamation scheme under Section 18 of the Sick Industrial Companies (Special Provisions) Act, 1985, whether it automatically fulfills the conditions of Section 72A of the Income Tax Act.
Whether the BIFR can lawfully refuse to make a declaration under Section 72A after sanctioning the amalgamation scheme.
The interpretation of Section 32(2) of the Sick Industrial Companies Act regarding the power to apply Section 72A.
The relevance of factors such as the company being closely held, cash profit, and positive net worth to the test of financial non‑viability under Section 72A.

Legislation cited

Income Tax Act, 1961s. 72, s. 72A
Sick Industrial Companies (Special Provisions) Act, 1985s. 15(8), s. 16, s. 17, s. 18, s. 3(0), s. 32(2)

Subjects

Section 72ASick Industrial Companies Actamalgamationaccumulated lossunabsorbed depreciationfinancial non‑viabilitypublic interestBIFRtax benefitscheme sanction

Judgment

INDIAN SHAVING PRODUCTS LTD. A
v.
1
BOARD OF INDUSTRIAL AND FINANCIAL
RECONSTRUCTIONS & ANOTHER

JANUARY 3, 1996
B
[S.P. BHARUCHA AND S. SAGHIR AHMED, JJ.j

Income Tax Acr 196I : Section 72A--Accumulated loss and the
unabsorbed depre<.:iation of the a111alglunaling cn1npany shall be deenied to
be the loss or allo1'vance for depreciation nf the an1algan1ated con1pany. C
Sick Industrial Companies (Special Provisions) Act I91i5-Sectimis
3(0), I7, iii and 32(2)-Reference to BIFR for declaration as a Sick
Cnn1pany and sanction for a111algtunation--Sanctinn granted under Section
I Ii-Refusal of benefits under Section 72A of the Income Tax Act--Held
Requirenzentsfor Sanction under Section 1Rare sirnilar to declaration under D
Sel'tion 12A of the lncrnne Tt.1x Act-Hence, sanction of anralgamatinn also
implies grant of benefits of Section 72A of the Income Tax Act.

According to the Appellants, Sharp Edge Ltd, was its ·subsidiary
company which manufactured carbon steel blades. As on 31st March
1989, the accumulated loss of Sharp Edge amounted to Rs. 298 Iakhs E
against its paid up capital of Rs. 212 Iakhs. Sharp Edge having become
a Sick Industrial Company, a reference was made to the· Board of
Industrial and Financial Reconstruction (BIFR) under section 15(8) of
the Sick Industrial Companies (Special Provisions) Act 1985 (hereinafter
referred to as the 'Said Act'). F

BIFR discussed the amalgamation of Sharp Edge with the appel-
lant company and noted that it was not possible for sharp Edge to make
its net worth positive on its own and appointed ICICI as ~he operating
agency to examine the financial viability of Sharp Edge, and also to
G
prepare a scheme for rehabilitation. Subsequently, amalgamation was
allowed by BIFR but without granting any benefits of Section 72A of the
Income Tax Act.

A request to reconsider its order was made to BIFR by the
appellants and the same was rejected on the grounds that sharp Edge was H
31
32 SUPREME COURT REPORTS [1996] 1 S.C.R.
A a closely held company and its liabilities were mainly in respect of the
appellants which was a strong base company; and that sharp Edge had
been showing a cash profit for the last three years and its net worth had
since become positive.

On an appeal preferred by the appellants, the appellate authority
B upheld the order of BIFR.

Hence, this appeal.

Allowing the appeal, this Court

c HELD : 1.1. For the purposes of according sanction to a scheme
of amalgamation of a Sick Industrial Undertaking with any other
Company under Section 18 of the Sick Industrial Companies (Special
Provisions) Act, 1985, BIFR has to be satisfied that the amalgamating
company is not financially viable, which is the effect of Section 3 (0) of
the said Act, and that the amalgamation is necessary or expedient in the
D public interest, which is the effect of Section 17 and 18 of the said Act
read together. [40-E]
'
1.2. Sanction of a scheme of amalgamation under Section 18 of the
said Act necessarily implies tlilat the requirements of section 72A Act of
E the Income Tax Act have been met and BIFR must exercise the power
conferred upon it by Section 32(2) of the said Act and make the declara-
tion contemplated by section 72A of the Income Tax Act.

Commissioner of Income Tax, Bombay and Ors. v. Mahindra and
Mahindra Ltd. and Ors., 144, ITR. 225, referred to. [40-F-G]
F
1.3. The conditions for !>anctioning a scheme under Section 18 of
the said Act being the same as those required for a declaration under
Section 72A of the Income Tm< Act, BIFR could not have sanctioned the
scheme of amalgamation of Sharp Edge with the appellant but declined
to make the declaration under Section 72A of the Income Tax Act with
G regard to that amalgamation. [40-G-H]

CIVIL APPELLATE JURISDICTION Civil Appeal No. 5638 of ~
1994.

From the Judgment and Order dated 20.12.93 of the Appellate Author-
H ity for Industrial and Financial Reconstruction, New Delhi in Appeal No. 51
INDIAN SHAVING PRODucrs LTD. 1: BO. OF JNDL. & FINANCIAL RECONSTRUCTIONS [BHARUCHA, J.] 33
of 1992. A
R.K.P. Shankar Dass and Ashok Grover for the Appellant.

The Judgment of the Court was delivered by. :"

BHARUCHA, J. This appeal by special leave impugns an order of the
B
Appellate Authority for Industrial & Financial Reconstruction. The im-
pugned order upheld the order of the Board for Industrial and Financial
Reconstruction, established under the Sick Industrial Companies (Special
Provisions) Act, 1985 (hereinafter called the said Act, by which the benefit
of the provisions of section 72A of the Income Tax Act, 1961, was not extend
to the appellant upon the amalgamation of Sharp Edge Limited with it. c
Notice upon this appeal was issued to the Central Board of Direct
Taxes and it was duly served. It has not entered appearance.

Section 72A of the Income Tax Act states "That whether there has been
an amalgamation of a company owning an industrial undertaking with D
another company and the central Government, on the recommendation of the
specified authority, is satisfied that the following conditions are fulfilled,
namely :

"(a) the amalgamation company was not, immediately before such E
amalgamation, financially viable by reason of its liabilities, losses
and other relevant factors;

(b) the amalgamation was in the public interest; and

(c) such other conditions as the Central Government may, by F
notification in the Official Gazette, specify, to ensure that the benefit
under this section is restricted to amalgamation which would
facilitate the rehabilitation or revival of the business of the amalga-
mating company,

-
then, the Central Government may make a declaration to that effect, and, G
thereupon, notwithstanding anything contained in any other provisions of
..; this Act, the accumulated loss and the unabsorbed depreciation of the
amalgamating company shall be deemed to be the loss or, as the case may
be, allowance for depreciation of the amalgamated company for the previous
year in which the amalgamation was effected, and the other provisions of this H
34 SUPREME COURT REPORTS [1996] I S.C.R.
A .<\ct relating to set off and carry fonvard of Jos...; and a!kl\vance for deprecia-
tion shall apply accordingly .............. ".

"Specified authority" has been defined for the purposes of Section 72A to
111can such authority as the Central (iovcrn~nent 1night, by notification in the
Official Gazette. specify.
B
The said Act \Vas cnae-ted to nH1ke. in the public interest, special
provisions \Vi th ·u vic\V to securing the tin~cly detection of sick and potentially
:')ick con1panics o\vning industrial unde1takings, the speedy dete1n1inati'on by
a board of experts of the preventive. ameliorative, ren1edial nnd other
1ncasures \vhich \Vere needed to be taki::n \Vi th respect to such co1npanies and
c the expeditious enforcement thereof. Section 4 constitutes the Board for
0

Industrial and Financial Reconstruction (BIFR) and Section 5 constitutes the
Appellate Authority. Chapter III deals with references. inquiries and schemes.
·rhc provisions of Section 15(1) stat.:: that where an industrial co1npany has
bcco1ne a sick industrial i.:on1pany, its Board of Directors shall \vithin sixty
D days from the date of finalisation of the duly audited accounts of the
company for the financial year as at the end of which the company has
beco1nc a sick industrial co1npany, rnake a· reference to the BIFR for
detennination of the measures which should be adopted with respect to the
company. A sick industrial company" was defined by Section 3(0) to mean
an industrial co1npany \Vhich bad at the end of any financial year accumu-
E
lated losses equal to or exceeding it:s en~ire net w011h and had also suffered
cash losses in such financial year and the financial year immediately
preceding such financial year. This definition was substituted in 1994 so that
it no\v means an industrial comp~ny (being a company registered for not less
than five years) which has at the end of any financial year accumulated losses ~
F equal to or exceeding its entire net worth. Section 16 requires the BIFR to
n1akc such inquiry as it may deem fit for dctennining whether any industrial
company has bcco1nc a sick industrial company, inter alia, upon receipt of
a reference with respect to such company under Section 15. The BIFR may,
for the disposal of such inquiry. require an operating agency to enquire into
G and make a report with respect to such matters as the BIFR may specify. The
inquiry is required to be completed \Vi thin sixty days from its commencement
and an inquiry is deemed to have commenced upon receipt by the BIFR of
a reference. Section 17 so far as is relevant reads thus :

"17. Powers of Board to make suitable order on the completion of
H inquiry -
I\()].\\. .... ,\I\(' rR1 ll1\ Cf" u Ll ' BD. ( lf i,;,[)I. ,!(:IT\,\ \.Cl-\L Rr;n l\STRl CTI! l;\..~ I B\I,.\!'{ '( ll \, I, I J~
r
( j) 1 :11 tcr inaking a;1 i:Hjl!iry L11ldcr Section 16, the Board is :-.ati~fi..:J J\
that a con1pany hJs beco1nc a sick industrial con1pany. the BllnrJ
sha:I. after con'.idering all the relevant facts anJ circun1stance~ of
the case. dc·..:idc. as soo11 ;.1:-. n1ny be by order in V.Titing, \Vhether it
is practicable for the con1pany to n1akc its net \\'Orth exceed the
accu1nulatec! lo:-.S('S \vithin a rcason;,_ib\c tin1c.
13
(2) lf tile Board d..::cidcs u11dCr Sub-'scction (I) that it is practicable
for a sick ir:du:-.trial conirany to n1akc its net \vorth e;..cccd the
a'ccun1ul<.ned lo:..scs \\'ithin a rcason:tble tin1c. the Board. Shall, by
order in \vriting anJ subject to such rcstrictinns or conditions as inay
be specified in the order. give such tin1c ~o the company ~sit 1nay C
dcc1n fit to 1nakc its net worth cxccc:.i the accu1nulatcd lo~scs.

(3) If the Board decides under sub-section (I) that it is not
pn.icti~ablc for a sick industrial company to n1akc its net \V01th
exceed the accun1ulated losses \Vithin a reasonable time and that it
is necessary or expedient in the public interest to adopt all or any D
of the n1easurcs specified in Section 18 in relation to the said
con1pany lt n1ay. as soon as 1nay be, by order in wiiting, direct any
npcrating agency specified in the order to prepare, having regard to
such guidelines as may be specified in the order, a scheme providing
for such incasures in relation to such_ company. E

Section 18 Slates that where an order has been made under Section 17(3) in
, relation to any sick industrial company, the operating agency specified in the
order shall prepare a scheme with respect to such company providing for the
measures set out therein. The following measure is referredw in clause (c)(i),
namely, "the amalgamation of the sick industrial company with any other F
company". The scheme prepared by the operating agency is required to be
examined by the BIFR and its copies sent with such modifications, if any,
as may have been made by the BIFR to the sick industrial company. the
operating agency and to the other company concerned in the proposed
amalgamation and, after consideration of objections, the BIFR is required to
sanction the scheme, which would come into force on such dated as it might
G
specify. Section 32(2) reads :

"Where there has been under any scheme under this Act an
amalgamation of a sick industrial company with another company,
the provisions of Section 72-A of the Income Tax Act, 1961 (43 of H
36 SUPREME COURT REPORTS [1996] l S.C.R.
A 1961), shall, subject to the modifications that the subject to the
modifications that the power of the Central Government under that
section may be exercised by the Board without any· recommenda-
tion, by the specified authority referred to in that section, apply in
relation to such amalgamation as they apply in relation to the
amalgamation of a company owning an industrial undertaking with
B
another company.

Sharp Edge Ltd. was incorporated in 1956 to manufacture carbon steel
blades. Its controlling interest was held by different companies at different
times. From August 1986 onwards the shareholding was taken over by the
c appellant. Subsequent to 1983 Sharp Edge was not doing well. As on 31st
March, 1989, its accumulated loss amounted to Rs. 298 lakhs against its paid
up capital of Rs. 212 lakhs. A reference was made to the BIFR under Section
15(8) of the said Act, Sharp Edge having become as a sick industrial
company. On 9th July, 1991, the amalgamation of Sharp Edge with the
appellant company was dismissed by the BIFR. After considering all the
D submissions made to it, the BIFR noted that it was not possible for Sharp
Edge to make its net worth positive on its own and it was in the public interest
to take such measures as might be feasible for its rehabilitation. Accordingly, '
in exercise of the powers under Section 17(3) of the said Act, ICICI was
appointed as the operating agency with the task of examining the viability
E of Sharp Edge and for preparing a scheme to rehabilitate it. On 13th
November, 1991, the BIFR observed that Sharp Edge's performance had
significantly improved during the last two years mainly because of the
management and financial support from the appellant and its net worth had
become positive. The appellant was also doing quite well and had the
necessary financial strength to rehabilitate its closely held subsidiary
F
(Sharp Edge) without further financial reliefs and concessions. The BIFR
then said : "In view of the consensus among the concerned parties for the
long term benefits to the sick company flowing from its merger with the
parent company, the Bench acceded to the request of the company to allow
the amalgamation of the two companies but without granting any benefits
G under section 72A of the Income Tax Act." The operating agency was,
accordingly, directed to sul>mit a revised draft rehabilitation-cum-merger
scheme.

On 2nd April, 1992, the appellant wrote to the BIFR and submitted that
H it should reconsider the request for the benefit of the provisions of Section
INDIAN SHAVING PRODUCTS LTD. 1: BD. OF INDL. & FINANCIAL RECONSTRUCTIONS [BHARUCHA ..I.I 37
72A of the Income Tax Act favourably, for the reasons stated by it. On 23rd A
April, I 992, the BIFR considered the material on record and observed that
no objection was received to the notified rehabilitation scheme and that the
required consents and approvals of all the concerned parties to the said
scheme had been obtained. It said : "The company's request for grant of
benefit under Section 72A of the Income Tax Act, was not considered
B
justified by the Bench as it was a closely held company. Its liabilities were
mainly in respect of its parent company, namely, Indian Shavings Products
Ltd. (ISPL)., it had been showing a cash profit for the last 3 years and its
net worth had since become positive, as also ISPL was a strong base
company. The BIFR sanctioned the scheme, to come into force with
immediate effect. Under the terms of the scheme the amalgamation took c
effect on !st April, 1991.

Against the order of the BIFR declining to grant the benefit of a
Section 72A of the Income Tax Act to the amalgamation, the appellant
preferred an appeal. The appellate authority noted that the BIFR had given
five reasons for declining the benefit under Section 72A, namely, (1) that D
Sharp Edge was a closely held company; (2) its liabilities were mainly in
respei;t of the appellant; (3) Sharp Edge had been showing a cash profit for
the last three years; (4) its net worth had since become positive; and (5) the
appellant was a strong base company. In relation to these reasons, the
appellate authority said: E
"None of these factors can be consfdered totally irrelevant or
extraneous except possibly the fact that both these companies are
closely companies and also the fact that all the liabilities of the sick
industrial company are in respect of its parent company namely, the
amalgamating company, the ISPL. It may also be stated that, as on F
the date of amalgamation, that is, on April 1, 1991, the sick
industrial c.ompany's net worth had not yet become positive."

The appellate authority concluded its order thus :

"Financial viability or non-viability is determined by the three G
facturs of profitability, liquidity and solvency. It has been shown
above that the sick company had generated cash profits in the
preceding two years prior to the date of amalgamation, i.e., prior to
I .4.9 I, and thus was in a stage of incipient sickness and potentially
financially viable. This was thus the basis for the acceptance and H
~Ll'kl:.\!E Ull 'lff HEPORTS f.19%1 l S.C.R.
A s~. ndion n'.· tht:: n:habii it auon sLhcm..:.

27. Public intl'rc~t has 1~1 be j11dgc<l !rom a t.liffcrent stand-point. It
has to be examined whether. if this income-tax benefit were not to
be granted, the rcbahilitation-n1111-mcrger scheme would succeed or
fail and if. in the event of the latter, the economic and social costs
to the community would be such as to warrant the gram of the
benefit. On the facts of the case, with both the companies having
generated cash profits immediately p1:eceding amalgamatinn, it can
be safely said that the rchabilitati0n scheme would ccnainly go
through,_even without the grant of thi s benefit and that such a grant,
c if made, would be at the cosr of the public exchequer and be thus
altogether unwarranted and undeserved. It was not the intention of
the legislature while confen'ing this discretionary power ori the
BIFR/AAIFR, that it should be used so as to grant unintended
benefits to profit making companies. Such a exercise of discretion
would be unreasonable and would call for judicial inte1ferencc. This
D i~ not the case here. The BIFR has wisely anJ properly exercised
this discretion in not granting thi s benefit, as part of the rehabilita-
tion exercise. Its order, in this regard, docs not, therefore call for any
interference and has to be affinned, which we accordingly do.

28. The appeal, for all the above reasons, does not have any merit
E
and is, therefore, dismissed as such.

Section 72A of the Income Tax Act was considere<l by this Court in
Commissioner of Income-Tax, Bombay am/ Ors. v. Mal1indra u11d Mahi11dm
Ltd. and Ors., 144 l.T.R. 225. This case arose prior to the coming into force
F of che said Act, that is to say, it was a case when sanction under Section 72A
was required to be given by the Central Government upon the recommen-
dation of the specified au thority thereunder. Learned counsel for the
appellant relied upon the following passage in the Judgment :

"Before undertaking a scrutiny of these reasons for ultimately
G deciding whether the impugned conclusion of the specified author-
ity and the Central Government is liable to be interfered with or not
it will be useful to indicate briefly the object with which this new
provision of s.72A was introduced in the Act as it will throw light
on what was the mischief or situation that was intended to be
H remedied by its introduction as also the true concept of financial
IND!AN SHAVING PRODUCTS LTD. 1: BD. Of' lNlJL. &. I l~:.\NCIAL RECONSTRUCT/fll\S IP.HARlXTIA, J.I 39
non-vi;ibiliiy. From the Budget speech of the Finance Minister. the ,\
Notes on Ciauses of the Finance (No. 2) Bill of 1977 and the
1ncn101·audu1n cxplJining the provisions of the s~1id Bili it \vt-ll
appear clear that sickness among industrial u1H..1L·rtakings \Vas rt:>
gai·Jcd as a n1atlcr of grnve national concern inas111uch as closurL'
of any sizable 111anufacluring unit in any industry c?1tailc<l social
costs in te1n1s of loss of produ:.-:tion an<l uncn1ploy1ncnt as al s() \Vastc
of valuable capital assets, ::in<l experience had sho\vn tln1t taki.ng oVcr
of such Sick units by Govcrn1nent \Vas .not _always ~· ..... 11 i-;factory or
er:ono1nical solution: it \\/'.JS felt that a 111orc effective nicthod \Vouk.J·
be to facil iu·1tc an1algan1ation of sick industrial units \Vi th sound.qncs
by providing incentives anJ reJ11(•''iilg i1npedi111cnts in the WJ.)r of
'iuch an1algcunation \vl~ich \vould not 1nc,cly relieve the Govt. of
uncconon1ic~1l burrlcn of 1.aking ovc~· <:111J run·iing sick units but save
the G?vt. l"ro1T1 social ::osts in tcnns of loss ol productiorv and
U~1en1pJoyme11t. W; th <;UCh objc:.:t1 \'C in ViC\\I, in order to facilitate the
1nerger of sick indu~tri~:: uni ls 'Vllh sound lJnes and as and. by: way [)
of offering an incCHlivc in lhat behalf. s. 72A \vas introduced in.thC
Act, \vhcreunder, by a· ch·cn1ing fiction. th~ accu1nulated loss or
unabsorbed depreciation of the a1nalga111~1l!ng co1npany i_s treated to
be a loss or, as the ca5"c n1ay be, allov. ance fo·· dcpreciriiion of the
~nnalga111ated co1npa11v in the previous year iay.:h!i.·h the a1'nalgan1~1-
.[:
tion \Vas effected; but the :.n11algan1atcd co1npany although a Suc-
cessor in interest, would be cntit!cJ to cany for\vard an<l set otJ the
accumulated IOss and unabsorb~d depreciation of the ama~gamating
company on.ly where the a1na1gan1ating con1pnny \Vas not, immedi·
ately before such amalgamation, financially. viable ..tn<l the amaJg;1-
1nation \Vas in public interest. The expression "financial non· F
viability" has not been defined in the Act but the Finance Minister's
speech, the Notes on Clauses of th·e Rill and the Memorandum
explaining the prov;sions thereof :nakc it clear that the financial
non-viability of an underta]<ing has been equated with the 'sickness'
of such undertaking and obviously in the context of its revival by
a sound undertaking the sickness must be of a tcniporary character G
;ind not any basic or pcnnanent sickness.· .L\n 1indCrtakiµg which is
basically or potc11tially non-viable wiH ordinarily be incapable of
revival rind \vould face a closure; in other \\'Ctds. the financial !ll1ll·
viUbility spoken of by the section n1ust .refer t.o sickness brbught
;,:.bnut by te.mporary adverse financial circumstances tl~at disables the H
40 SUPREME COURT REPORTS (1996] 1 S.C.R.
A unit to stand and work on its own. This is also made clear by the
provision contained in cl. (a) of sub-s. (!) which states that the
financial non-viability of tile amalgamating company has to be
judged by referepce to "its liabilities, losses and other relevant
facts".

B
Under Section 72 of the Income Tax Act, to give to the amalgamated
company the benefit of tbe loss or, as the case may be, allowance for
depreciation of the amalgamating company for the previous year in which
the amalgamation was effected for the purposes of the Income Tax Act, the
Central Government must, upon the recommendation of the specified author-
c ity, be satisfied that the amalgamating company was not, immediately before
the amalgamation, financially viable by reason of its liabilities, losses and
other relevant factors, and that the amalgamation was in the public interest.
By reason of Section 32(2) of the said Act, where there has been under any
scheme thereunder an amalgamation of a sick industrial. company with
D another company, the provisions of Section 72A of the Income Tax Act shall
apply in relation to suyh amalgamation, subject to this modification that the
power of the Central Government is to be exercised by the BIFR without the
necessity of a recommendation by the specified authority mentioned in
Section 72A of the Income Tax Act. This is because, for the purposes of
according sanction to a scheme of amalgamation of a sick industrial
E undertaking with any other company under Section 18 of the said Act, the
BIFR has to be satisfied that the amalgamating company is not financially
viable, which is the effect of Section 3(o) of the said Act, and that the
amalgamation is necessary or expedient in the public interest, which is the
effect of Sections 17 and 18 of the said Act read together. Sanction of a
F scheme of amalgamation under Section 18 of the said Act necessarily implies
that the requirements of Section 72A of the Income Tax Act have been met
and the BIFR must exercise the power conferred upon it by Section 32(2)
of the said Act and make the declaration contemplated by Section 72A of
the Income Tax Act.

G The conditions for sanctioning a scheme under Section 18 of the said
Act being the same as those required for a declaration under Section 72A
of the Income Tax Act, the BIFR could not have sanctioned the scheme of
amalgamation of Sharp Edge with the appellant but declined to make the
declaration under Section 72A of the Income Tax Act with regard to that
H amalgamation.
INDIAN SHAVING PRODUCTS LTD. v. BD. OFJNDL. & FINANCIAL RECONSTRUCTIONS [BHARUCHA. J.] 4l
The appeal is allowed. The order under appeal as also the order of the A
BIFR declining to make a declaration under Section 72A of the Income Tax
Act in respect of the 1malgamation of Sharp Edge Ltd. with the appellant are
set aside and the BIFR is directed to make such declaration.

No order as to costs.
B
M.K. Appeal allowed.