24 October 2008
A company was incorporated in July 2004 . The company started Restaurant operations in the May 2005 .
The restaurant business was continued by the company till March 2008 . The Company has also exported frozen food to United Kingdom . Due to heavy operational cost the following losses as per income tax are accumulated .
Kindly advise if what conditions are to be fulfilled for claiming losses under Income tax Act in case we opt to merge this company into some other profitable company .
Our Group Company A has lend other group company B a unsecured loan of Rs 7 crores .Four years back
Company A was in resturant business and suffered heavy losses and at present Accumulated income tax loss is Rs 15 Crores . Since the company A left with no Funds to repay the amount to creditors .
Company B has no options just to outright purchase the business of company to adjust the loan outstanding .
How shall the company B shall reflect the business takeover of A as per Income tax .
CAclubindia
