Additional requirements for business reorganization regarding the set-off and carry forward of losses and depreciation allowances - (New) Section 116(8) to (11) / (Old) Section 72A(6) & (6A) ]

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....he conditions under section 70(1)(zf), • the accumulated business losses and unabsorbed depreciation of the predecessor are deemed to become those of the successor company. • The successor company can carry forward and set off these losses in accordance with the general provisions governing losses and depreciation. • This benefit is subject to continued compliance with the prescribed conditions under Section 116(9). Section 116(9): Consequences of Breach of Conditions • If the successor company subsequently fails to comply with any of the conditions specified in section 70(1)(zd) or 70(1)(zf): • any loss or depreciation already set off by the company is withdrawn. â....

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....he firm or proprietary concern; or • (iii) the private company or unlisted public company, as the case may be, which is deemed to be the loss of the successor entity, being- • (a) the amalgamated company; or • (b) the successor company; or • (c) the successor limited liability partnership, the eligible accumulated loss is deemed to become the loss of the successor entity, the successor does not receive a fresh eight-year period to carry forward such loss. Instead, the loss may be carried forward only for the balance of the original eight-tax-year period, counted from the tax year in which the loss was first computed in the hands of the predecessor entity. Under Section 72A(6)....

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.... • whereby • a private company or unlisted public company is succeeded by a limited liability partnership fulfilling the conditions laid down in the proviso to clause (xiiib) of section 47, • then, notwithstanding anything contained in any other provision of this Act, • the accumulated loss and the unabsorbed depreciation of the predecessor company, • shall be deemed to be the loss or allowance for depreciation of the successor limited liability partnership for the purpose of the previous year in which business reorganisation was effected and other provisions of this Act relating to set off and carry forward of loss and allowance for depreciation shall apply accordingly. ....