Amendment of section 2

Section 4 of the Finance Act, 1967 deals with amendment of section 2. CHAPTER III AMENDMENTS IN THE INCOME-TAX ACT Amendment of section 2 4. The Act was enacted on 05 Aug 1967.

CHAPTER III

AMENDMENTS IN THE INCOME-TAX ACT

Amendment of section 2

4. In section 2 of the Income-tax Act,—

(a) after clause (1), the following clause shall be inserted, namely:-—

'(1A) "amalgamation", in relation to companies, means the merger of one or more companies with another company or the merger of two or more companies to form one company (the company or companies which so merge being referred to as the amalgamating company or companies and the company with which they merge or which is formed as a result of the merger, as the amalgamated company) in such a manner that—

(i) all the property of the amalgamating company or companies immediately before the amalgamation becomes the property of the amalgamated company by virtue of the amalgamation;

(ii) all the liabilities of the amalgamating company Of companies immediately before the amalgamation, become the liabilities of the amalgamated company by virtue of the amalgamation;

(iii) shareholders holding not less than nine-tenths in value of the shares in the amalgamating company or companies (other than shares already held therein immediately before the amalgamation by, or by a nominee for, the amalgamated company or its subsidiary) become shareholders of the amalgamated company by virtue of the amalgamation,

otherwise than as a result of the acquisition of the property of one company by another company pursuant to the purchase of such property by the other company or as a result of the distribution of such property to the other company after the winding up of the first mentioned company;';

(b) after clause (37), the following clause shall be inserted, namely:—

'(37A) "rate or rates in force" or "rates in force", in relation to an assessment year or financial year, mean—

(i) for the purposes of calculating income-tax under the first proviso to sub-section (5) of section 132, or computing the income-tax chargeable under sub-section (4) of section 172 or sub-section (2) of section 174 or section 175 or sub-section (2) of section 176 or deducting income-tax under section 192 from income chargeable under the head "Salaries" or computation of the "advance tax" payable under Chapter XVII-C, the rate or rates' of income-tax specified in this behalf in the Finance Act of the relevant year;

(ii) for the purposes of deduction of tax under sections 193, 194, 194A and 195, the fate or rates of income-tax specified in this behalf in the Finance Act of the relevant year;';

(c) in clause (42A), in clause (i) of the Explanation,—

(i) in sub-clause (b), for the words, brackets and figures "clauses (i) to (iii)", the words, brackets and figure "subsection (1)" shall be substituted;

(ii) after sub-clause (b), the following sub- clause shall be inserted, namely:—

"(c) in the case of a capital asset being a share or shares in an Indian company, which becomes the property of the assessee in consideration of a transfer referred to in clause (vii) of section 47, there shall be included the period for which the share or shares in the amalgamating company were held by the assessee.".

[Finance (No.

2) Act, 1967]

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Section 4, The Finance Act, 1967 (Act 20 of 1967).