M/s. SIEL Limited vs. DCIT, LTU-1

Parties Involved

Facts Summary

The assessee, M/s. SIEL Limited (now known as Mawana Sugars Ltd.), filed seven appeals against the orders of the Commissioner of Income Tax (Appeals)-22, New Delhi, for Assessment Years 2003-04, 2006-07, 2011-12 to 2015-16. The Revenue also filed cross-appeals against the orders for Assessment Years 2006-07, 2012-13, 2014-15, and 2015-16. The appeals involve common issues and are heard together. The main issues pertain to the disallowance of long-term capital loss claimed by the assessee on the transfer of assets under a Scheme of Arrangement (SOA) and the disallowance of interest cost claimed as a deduction by the assessee.…

Legal Issues

• 1. Whether the transfer of land and investments to M/s Shivaji Marg Properties Limited and M/s Siel Holdings Limited under the SOA constitutes a 'demerger' under section 2(19AA) of the Income Tax Act.
• 2. Whether the disallowance of interest cost on investments and advances to group companies is valid.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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