Apart from availing the benefit of set off and carry forward of unabsorbed depreciation and accumulated losses, what are the other tax benefits if the strategy of the acquirer to merge with a loss making company is in th

One of the modes of corporate restructuring strategy is to merge with a sick or a company with accumulated losses. If the scheme of merger gets approval of the competent authority under section 72A of the Income-tax Act, 1961, the resultant company avails the opportunity of getting losses of sick undertakings offset against profit making undertakings of the transferee company. Even if approval by Competent Authority is not obtained, the merged undertakings of the resultant company still avail other benefits and privileges as detailed below under the Income-tax Act, 1961: The benefit of amortization of preliminary expenses under section 35D for the balance unexpired period out of 10 or 5 years shall be available to the resultant company. Capital expenditure on scientific research under section 35 can be availed by the resultant company. Expenditure for patent or copyrights under section 35A for the balance unexpired period of out of 14 years. Section 35DD for expenses towards amalgamation or demerger for next 5 years in equal installments. Similarly benefits under sections 35AB(3) and 35ABB are available to resultant company for the unexpired period if incurred for expenditure on know-how and telecom licenses respectively.