Section 72AB of Income Tax Act "Provisions relating to carry forward and set off of accumulated loss and unabsorbed depreciation allowance in business reorganisation of co-operative banks"
72AB. (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.