44DB. Special provision for computing deductions in the case
of business reorganization of co-operative banks.- (1)
The deduction under section 32, section 35D, section 35DD
or section 35DDA shall, in a case where business reorganisation
of a co-operative bank has taken place during the financial
year, be allowed in accordance with the provisions of this
section.
(2) The amount of deduction allowable to the predecessor
co-operative bank under section 32, section 35D, section 35DD
or section 35DDA shall be determined in accordance with the
formula—
A × B
C
where A = the amount of deduction allowable to the predecessor
co-operative bank if the business reorganisation had not taken
place;
B = the number of days comprised in the period beginning
with the 1st day of the financial year and ending on the day
immediately preceding the date of business reorganisation;
and
C = the total number of days in the financial year in which
the business reorganisation has taken place.
(3) The amount of deduction allowable to the successor co-operative
bank under section 32, section 35D, section 35DD or section
35DDA shall be determined in accordance with the formula—
A × B
C
where A = the amount of deduction allowable to the predecessor
co-operative bank if the business reorganisation had not taken
place;
B = the number of days comprised in the period beginning
with the date of business reorganisation and ending on the
last day of the financial year; and
C = the total number of days in the financial year in which
the business reorganisation has taken place.
(4) The provisions of section 35D, section 35DD or section
35DDA shall, in a case where an undertaking of the predecessor
co-operative bank entitled to the deduction under the said
section is transferred before the expiry of the period specified
therein to a successor co-operative bank on account of business
reorganisation, apply to the successor co-operative bank in
the financial years subsequent to the year of business reorganisation
as they would have applied to the predecessor co-operative
bank, as if the business reorganisation had not taken place.
(5) For the purposes of this section,—
(a) “amalgamated co-operative bank” means—
(i) a co-operative bank with which one or more amalgamating
co-operative banks merge; or
(ii) a co-operative bank formed as a result of merger of
two or more amalgamating co-operative banks;
(b) “amalgamating co-operative bank” means—
(i) a co-operative bank which merges with another co-operative
bank; or
(ii) every co-operative bank merging to form a new co-operative
bank;
(c) “amalgamation” means the merger of an amalgamating
co-operative bank or banks with an amalgamated co-operative
bank, in such manner that—
(i) all the assets and liabilities of the amalgamating co-operative
bank or banks immediately before the merger (other than the
assets transferred, by sale or distribution on winding up,
to the amalgamated co-operative bank) become the assets and
liabilities of the amalgamated co-operative bank;
(ii) the members holding seventy-five per cent or more voting
rights in the amalgamating co-operative bank become members
of the amalgamated co-operative bank; and
(iii) the shareholders holding seventy-five per cent or
more in value of the shares in the amalgamating co-operative
bank (other than the shares held by the amalgamated co-operative
bank or its nominee or its subsidiary, immediately before
the merger) become shareholders of the amalgamated co-operative
bank;
(d) “business reorganisation” means the reorganisation
of business involving the amalgamation or demerger of a co-operative
bank;
(e) “co-operative bank” shall have the meaning
assigned to it in clause (cci) of section 5 of the Banking
Regulation Act, 1949 (10 of 1949) 71 ;
(f) “demerger” means the transfer by a demerged
co-operative bank of one or more of its undertakings to any
resulting co-operative bank, in such manner that—
(i) all the assets and liabilities of the undertaking or
undertakings immediately before the transfer become the assets
and liabilities of the resulting co-operative bank;
(ii) the assets and the liabilities are transferred to the
resulting co-operative bank at values (other than change in
the value of assets consequent to their revaluation) appearing
in its books of account immediately before the transfer;
(iii) the resulting co-operative bank issues, in consideration
of the transfer, its membership to the members of the demerged
co-operative bank on a proportionate basis;
(iv) the shareholders holding seventy-five per cent or more
in value of the shares in the demerged co-operative bank (other
than shares already held by the resulting bank or its nominee
or its subsidiary immediately before the transfer), become
shareholders of the resulting co-operative bank, otherwise
than as a result of the acquisition of the assets of the demerged
co-operative bank or any undertaking thereof by the resulting
co-operative bank;
(v) the transfer of the undertaking is on a going concern
basis; and
(vi) the transfer is in accordance with the conditions specified
by the Central Government, by notification in the Official
Gazette, having regard to the necessity to ensure that the
transfer is for genuine business purposes;
(g) “demerged co-operative bank” means the co-operative
bank whose undertaking is transferred, pursuant to a demerger,
to a resulting bank;
(h) “predecessor co-operative bank” means the
amalgamating co-operative bank or the demerged co-operative
bank, as the case may be;
(i) “successor co-operative bank” means the
amalgamated co-operative bank or the resulting bank, as the
case may be;
(j) “resulting co-operative bank” means—
(i) one or more co-operative banks to which the undertaking
of the demerged co-operative bank is transferred in a demerger;
or
(ii) any co-operative bank formed as a result of demerger.
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