Closure of Unit

[Guest]

Hello,

We have opened Unit in Uttaranchal under 80IC in 2007-08. 100% IT exemption was allowable upto 31.03.2012.

We have opened another unit also in Uttaranchal Under 80IC in 2010-11. 100% IT expemption will be allowable upto 31.03.2015. My queries are

1.Can we close Unit I from 1st April'2012 and shift  the transactions to Unit II for availling 100% IT expemption.

2.Can we transfer the closing stock in Unit I to Unit II from 1-4-2012.

3.Can we transfer all the other balances(debtors,Creditors) from Unit I to Unit II w.e.f 01.04.2012.

Please advice me to proceed in a better way.

Uday.

[shreenivas dotihal]

as per my view, there is no specific provision in case of unit transfer to other unit.  but one can do by following way to create on company and demerged the unit one to new company to claim exemption under 80IC.

AI Summary

80IC exemption: where unit transfer lacks statutory provision, demerger into a new company may preserve tax benefits. Whether transactions, closing stock and balances of a unit whose 80IC exemption has expired may be shifted to another exempt unit; response states there is no specific provision for direct unit transfer, and suggests creating a company and demerging the unit into the new company to claim exemption under 80IC.