Hi All,
Kindly clarify my doubt.
Is carryforward of loss is possible in the below mentioned case:
Foreign Company purchases 100% shares of Indian Company, Both Companies have same director.
Thanks in advance
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Carry-forward of losses
Replies (13)
Yes. Provided that the conditions in section 80 are satisfied.
What about sec 79 which states who has 51% of voting power on end of FY for which return filed, should hold same during the end of FY in which you going to carryforward the ealier loss
I noticed something just now. How can one company acquire 100 percent shares of another company? For forming a company, atleast two persons are needed right?
Indian Company has Mr. A and Mr. B as director holding 50% each.
Above directors are also the directors of foreign company.
Now Foreign Company acquires
Ok. But after it is acquired by foreign company there is only one subscriber for shares. It is not possible.
The Delhi High Court (HC) held in a recent case that the taxpayer would not be entitled to carry
forward and set off unabsorbed losses on change in immediate shareholding by over 49% even
though the change in shareholding was within the group, and the ultimate holding company of both
the transferor and transferee was the same.
forward and set off unabsorbed losses on change in immediate shareholding by over 49% even
though the change in shareholding was within the group, and the ultimate holding company of both
the transferor and transferee was the same.
Is any section states there should be two subscriber?
I thought indian company can be a wholly owned subsidary of Foreign company.
If not possible. What is the concept of wholly owned subsidary?
Can u please state the case citation
hi Anitha, sec3 of companies act requires min 2 members in pvt co & 7 in case on public co.
an Indian co can definitely be a wholly owned subsidiary of any co. The holding co buys 100% shares but registers a few no of shares say 1 share in name of the company's nominee (a director can be a nominee)
yea, i tottaly foregt. then what is the concept of wholly owned subsidaries ?
ok thank you. Then in such case, carryforward is not possible is the final solution?
if its is pvt co then not possible. But you can still carry fwd any unabsorbed depreciation. since you mentioned it has unabsorbed losses, it should also be having unabsorbed depreciation.
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