Business loss carry forward in case of takeover

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Sandeep Modak (Querist)
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16 January 2011 Sir,

As per the subject, in case of takeover if the company who's business is takenover by another company has business losses can such losses be carried forward as business loss in the books of company who has taken over the business if so under which section.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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16 January 2011 Yes. You may refer Section 72A.
This section contains Provisions to c/f and set off of losses in case of amalgamation, demerger etc.

Sandeep Modak

Sandeep Modak (Querist)
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16 January 2011 Sir,
Here only shares are to be transfered where in new shareholders will takeover the business of the old company so would not be a case of amalgamation

CA Nitish Jain

CA Nitish Jain (Expert)
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16 January 2011 in such a case, there will only be a change in the shareholding of the company and management of the company.
it will not effect the provisions relating to set off and c/f.
the provision will apply as if no change has been made.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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16 January 2011 Now , You may Refer Section 79.

According to the Section if 51% of the shareholders are not the same, carry forward of losses will not be allowed.

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