One Co "ABC" has opened it's operation last year only & posted loss of Rs 8 crores. ABC is 100% subsidiary of "XYZ" which is a profit making company.
Can XYZ claim loss of ABC in its computation in income tax if yes pls also refer sections of it act also.
no. the two are separate companies. clubbing does not apply to a company.
Separate legal entity. ABC Co Loss cannot setup XYZ co Profit.
The only way XYZ can set off ABC's losses is if it amalagamtes with ABC. Then u/s 72 the losses & depreciation can be set off for upto 8 years from date of amalgamation & indefinitely respectively.
But in your case since the company was started last year, the intention would be to pursue long term business objectives. Hence, amalgamation might not be agreeable by the company.
agree wid all.....
NO WAYS how can one company claim the loss incurred by some other company....until n unless it amalgamates as it is mentioned by prateek above it should be the only way to claim the loss and depreciation as well
| Originally posted by : Prateek Jayachandra | ||
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The only way XYZ can set off ABC's losses is if it amalagamtes with ABC. Then u/s 72 the losses & depreciation can be set off for upto 8 years from date of amalgamation & indefinitely respectively. But in your case since the company was started last year, the intention would be to pursue long term business objectives. Hence, amalgamation might not be agreeable by the company. |
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Gupta Sachdeva & Co. Chartered Accountants
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