Transactions resulting in transfer

When a person has obtained a right by a transfer, either by itself or in connection with related activities, by virtue of which he has the authority to enjoy, immediately or in the future, any income of a non-resident person that, if it were subject to income tax, would have been chargeable to the first-mentioned person, that income shall be deemed to be the first-mentioned person's income for all purposes of this Act, whether or not it had been subject to income tax. Any income that has become the income of a non-resident shall, whether or not it would have been accountable to income tax without the requirements of this section, be deemed to be the income of the first-mentioned person for all purposes of this Act where any such first-mentioned person receives or is entitled to receive any capital sum.

 

Good to know facts on 12a registration.

 

The requirements of this subsection shall also apply to asset transfers and related activities that were completed prior to the effective date of this act. When an individual has already paid income tax on money that was presumed to belong to him and that individual later receives such income, that income will no longer be presumed to belong to that individual's income for the purposes of this Act. If the first-mentioned person demonstrates to the assessing officer's satisfaction neither that neither the transfer nor any associated operation had the avoidance of tax obligation as its purpose, nor that the exchange and all associated operations were commercial transactions and were not created with the intent to avoid tax liability, the provisions of this section will not apply.

 

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The Central Government may declare that the advantage under this section is only available for mergers that would make it easier for the business of the merging firm to recover, which it may do by publishing in the official gazette. The aggregated loss and unabsorbed depreciation of the merging company shall be deemed to be the loss or, as the case may be, allowance for depreciation of the merged company for the prior year in which the merger was accomplished, and the other provisions of this Act referring to set off and carry forward of loss and allowance for depreciation shall apply accordingly, notwithstanding anything enclosed in any other provision of this Act. If one requirement is not met, the amalgamated company must provide, along with its return of income for the relevant assessment year, a certificate from the relevant authority stating that sufficient steps have been taken by that company for the rehabilitation of the business of the amalgamating company. The accumulated loss may not be offset, carried forward, and unabsorbed depreciation may not be allowed in the assessment of the amalgamated company.

 

Straightforward information on 12a.