A scheme of amalgamation between Beta Manufacturing Ltd. (amalgamating company) and Gunjan Industries Ltd. (amalgamated company) was approved by the National Company law Tribunal. The amalgamation of two companies became

CS Professional · Goods and Services Tax (GST) and Corporate Tax Planning · PYQS · June 2026
A scheme of amalgamation between Beta Manufacturing Ltd. (amalgamating company) and Gunjan Industries Ltd. (amalgamated company) was approved by the National Company law Tribunal. The amalgamation of two companies became effective from 1st April, 2025. The following business losses and unabsorbed depreciation of Beta Manufacturing Ltd. are given below: Assessment Year Business Loss (₹) Unabsorbed Depreciation (₹) A.Y. 2017-18 25,00,000 10,00,000 A.Y. 2018-19 18,00,000 5,00,000 A.Y. 2024-25 12,00,000 6,00,000 A.Y. 2025-26 35,00,000 — Other Information: (1) The amalgamated company had a net profit of ₹ 20,00,000 before set-off of losses for the Financial Year 2025-26. (2) All the conditions specified under Section 72A of the Income-tax Act, 1961, as amended by the Finance Act, 2025, for the carry forward of losses and unabsorbed depreciation in the case of amalgamation are satisfied. (3) Gunjan Industries Ltd. has not opted for the provision of section 115BAA. Based on the above information, answer the following: Examine the conditions to be satisfied by the amalgamating company as specified under Section 72A(2) of the Income-tax Act, 1961, for claiming the benefit of carry forward and set-off of accumulated losses and unabsorbed depreciation in the case of amalgamation.

Answer & Explanation:

Conditions to be satisfied by the Amalgamating Company u/s 72A(2): (i) The amalgamating company has been engaged in the business, in which the accumulated loss occurred or depreciation remains unabsorbed, for 3 or more years prior to the date of amalgamation. (ii) The amalgamating company has held continuously as on the date of the amalgamation at least 75% of the book value of fixed assets held by it 2 years prior to the date of amalgamation.

Topics: Corporate Tax Planning

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