Commissioner Of Income Tax vs Amalgamation Pvt. Ltd.

Whether the first proviso to Section 12B(2) of the Income Tax Act 1922 applies to sales of shares between connected companies where the transaction was necessitated by statutory compliance under the Companies Act 1956 and prices were fixed by the Company Law Administration --- Held No, as the object was not tax avoidance. Whether loss on guarantee given to a subsidiary company is allowable as business expenditure --- Held Yes, as it was incurred in the course of business.