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CMA Final · Direct Tax Laws and International Taxation · Assessment of Companies

For the purposes of section 314 of the Income-tax Act, 2025, which of the following is included in the meaning of 'successor'?

A successor means all resulting companies in a business reorganisation, whether or not each company was already in existence before the reorganisation. The definition in section 314 is not limited to pre-existing companies or to the company receiving the largest share of assets.

  1. AAll resulting companies in a business reorganisation, whether or not the company existed before the reorganisationCorrect
  2. BOnly the resulting company that existed before the reorganisation
  3. COnly the company that holds the largest share of the transferred assets
  4. DThe transferor company that continues after the demerger

Explanation

Section 314(4)(c) defines successor as all resulting companies in a business reorganisation, whether or not in existence earlier. Limiting it to pre-existing companies or to the largest recipient adds conditions the definition does not contain.

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