Allowablity of interest of merged company

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This query is : Resolved

MANISH PAREKH (Querist)

28 July 2009 Dear all,

My Querry :

- Interest has been disallowed to a company for non payment of TDS for say 2 years
- Later the company is merged with another company - where again Interest is disallowed for again say 2 years
- Now the company pays the TDS at a time in current year - for all the 4 years
- Thus it will be allowed the interest in the current year as per section 40(a)(ia) in the year of payt of TDS

Whether the company will get deduction for interest of earlier years, of the earlier company, who had been merged with the new company ?

Regards

Manish Parekh

M Prabhakar Menon

M Prabhakar Menon (Expert)

28 July 2009 Section 40a(1) is clear on this issue that as and when TDS is paid for certain expenses the corresponding expense will be allowed The issue here is what the entity did after getting the Assessment Order disallowing the expense in question Did it file a aspplication u/s 154 or a revised return was filed for getting the benefit in the year of payment of TDS.

MANISH PAREKH

MANISH PAREKH (Querist)

28 July 2009 question is whether such disallwances will be allowed to the new company after the merger - since the amount pertains to the old company which is merged

M Prabhakar Menon

M Prabhakar Menon (Expert)

29 July 2009 U/s 72A there is a provision for set off and carry forward of accumulated loss and unaborbed depreciation in amalgamation or demerger More data is required to specifically examine the applicability of this provision in your case.

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