72AB. Provisions relating
to carry forward and set off of accumulated loss and unabsorbed
depreciation allowance in business reorganisation of co-operative
banks.- (1) The assessee, being a successor co-operative
bank, shall, in a case where the amalgamation has taken place
during the previous year, be allowed to set off the accumulated
loss and the unabsorbed depreciation, if any, of the predecessor
co-operative bank as if the amalgamation had not taken place,
and all the other provisions of this Act relating to set off
and carry forward of loss and allowance for depreciation shall
apply accordingly.
(2) The provisions of this section shall apply if—
(a) the predecessor co-operative bank—
(i) has been engaged in the business of banking for three
or more years; and
(ii) has held at least three-fourths of the book value of
fixed assets as on the date of the business reorganisation,
continuously for two years prior to the date of business reorganisation;
(b) the successor co-operative bank—
(i) holds at least three-fourths of the book value of fixed
assets of the predecessor co-operative bank acquired through
business reorganisation, continuously for a minimum period
of five years immediately succeeding the date of business
reorganisation;
(ii) continues the business of the predecessor co-operative
bank for a minimum period of five years from the date of business
reorganisation; and
(iii) fulfils such other conditions as may be prescribed
to ensure the revival of the business of the predecessor co-operative
bank or to ensure that the business reorganisation is for
genuine business purpose.
(3) The amount of set-off of the accumulated loss and unabsorbed
depreciation, if any, allowable to the assessee being a resulting
co-operative bank shall be,—
(i) the accumulated loss or unabsorbed depreciation of the
demerged co-operative bank if the whole of the amount of such
loss or unabsorbed depreciation is directly relatable to the
undertakings transferred to the resulting co-operative bank;
or
(ii) the amount which bears the same proportion to the accumulated
loss or unabsorbed depreciation of the demerged co-operative
bank as the assets of the undertaking transferred to the resulting
co-operative bank bears to the assets of the demerged co-operative
bank if such accumulated loss or unabsorbed depreciation is
not directly relatable to the undertakings transferred to
the resulting co-operative bank.
(4) The Central Government may, for the purposes of this
section, by notification in the Official Gazette, specify
such other conditions as it considers necessary, other than
those prescribed under sub-clause (iii) of clause (b) of sub-section
(2), to ensure that the business reorganisation is for genuine
business purposes.
(5) The period commencing from the beginning of the previous
year and ending on the date immediately preceding the date
of business reorganisation, and the period commencing from
the date of such business reorganisation and ending with the
previous year shall be deemed to be two different previous
years for the purposes of set off and carry forward of loss
and allowance for depreciation.
(6) In a case where the conditions specified in sub-section
(2) or notified under sub-section (4) are not complied with,
the set off of accumulated loss or unabsorbed depreciation
allowed in any previous year to the successor co-operative
bank shall be deemed to be the income of the successor co-operative
bank chargeable to tax for the year in which the conditions
are not complied with.
(7) For the purposes of this section,—
(a) “accumulated loss” means so much of loss
of the amalgamating co-operative bank or the demerged co-operative
bank, as the case may be, under the head “Profits and
gains of business or profession” (not being a loss sustained
in a speculation business) which such amalgamating co-operative
bank or the demerged co-operative bank, would have been entitled
to carry forward and set-off under the provisions of section
72 as if the business reorganisation had not taken place;
(b) “unabsorbed depreciation” means so much
of the allowance for depreciation of the amalgamating co-operative
bank or the demerged co-operative bank, as the case may be,
which remains to be allowed and which would have been allowed
to such bank as if the business reorganisation had not taken
place;
(c) the expressions “amalgamated co-operative bank”,
“amalgamating co-operative bank”, “amalgamation”,
“business reorganisation”, “co-operative
bank”, “demerged co-operative bank”, “demerger”,
“predecessor co-operative bank”, “successor
co-operative bank” and “resulting co-operative
bank” shall have the meanings respectively assigned
to them in section 44DB.
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