TaxTMI 
TaxTMI 
2015 (11) TMI 648
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....hra Pradesh vide orders dated 08.03.2006 and 17.04.2006 respectively, M/s. Shree Vani Sugars and Industries Ltd., (hereinafter referred to as the 'Amalgamating Company') amalgamated with the respondent-assessee M/s.KBD Sugars and Distilleries Ltd., (hereinafter referred to as the 'Amalgamated Company') with effect from 01.03.2005. The amalgamating company was engaged in the business of manufacturing and trading of sugar and generation of power. It was in the business of manufacture of sugar since 1984 and had commenced the business of power generation with effect from 08.08.2003, which was by way of expansion of its business. 2. For the relevant year 2005-06, the assessee-amalgamated company had declared its business income of Rs. 24,64,....
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....ding that the assessee is entitled to set off of unabsorbed business loss/unabsorbed depreciation pertaining to the power generation business of the amalgamating company, though the business of power generation was commenced by the amalgamating company from 08.08.2003 and consequently does not fulfil conditions prescribed u/s.72A(2)(a)(i) of the Act?" 5. The submission of Sri K.V.Aravind, learned counsel for the appellant-Revenue is that even though the amalgamating company had been carrying on the business of manufacturing of sugar for the past several years but it had commenced its business of power generation only on 08.08.2003, which was within three years of the amalgamation, and thus the benefit of carrying forward of such losses o....
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....ent business units. In the alternative, it is submitted that even if the business loss of power generation unit of the amalgamating company is treated separately, then too, the benefit of Section 72A of the Act has rightly been given, as even though the commercial production or generation of power may have commenced from 08.08.2003, but it was engaged in the business of power generation from the year 2000, for which evidence had been duly adduced before the authorities below. 7. For proper perusal of this case, the relevant Sub-sections (1) and (2) of Section 72A of the Act are reproduced below: Sec.72A: Provisions relating to carry forward and set off of accumulated loss and unabsorbed depreciation allowance in amalgamation or ....
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....e-fourths of the book value of fixed assets held by it two years prior to the date of amalgamation; (b) the amalgamated company- (i) holds continuously for a minimum period of five years from the date of amalgamation at least three-fourths of the book value of fixed assets of the amalgamating company acquired in a scheme of amalgamation; (ii) continues the business of the amalgamating company for a minimum period of five years from the date of amalgamation; (iii) fulfils such other conditions as may be prescribed to ensure the revival of the business of the amalgamating company or to ensure that the amalgamation is for genuine business purpose.] 3. xxxx 4. xxxx 5. xxxx ....
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....nding, only clarifies that the phrases 'commencement of business' and 'engaged in business' are different. Former may apply for Section 32 but the latter would apply in the case of Section 72A of the Act. 11. In the present case, the licence for setting up business of power generation, loans for the same, construction of the building and purchase of machinery etc., had started from the year 2000 itself, which was duly reflected in the books of account of the amalgamating company. As such, the view taken by the Appellate Authority [CIT (Appeals)] as well as the Tribunal, in this regard that the amalgamating company was engaged in the business of generation of power much prior to three years from the date of amalgamation of the Company, ca....