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2017 (12) TMI 1472 - AT - Income TaxBifurcation of brought forward losses and unabsorbed depreciation - Held that:- As long as brought forward losses and unabsorbed depreciation can be directly relatable to the undertakings transferred to the resulting company (i.e. Advantage Retail Pvt Ltd) in this case, the same is to be carried forward in the hands of resulting company. What it essentially requires is that the explanation of the assessee, on how is it directly relatable to the units transferred to resulting company, is to be examined on merits and, if no defects are found in the same, it is to be accepted. These explanations cannot be brushed aside on the ground that separate books of accounts are not maintained, which is not a condition precedent for invoking section 72A(4)(a) anyway, or that these explanations were not furnished at the time of demerger. Nor, for that purpose, rejection of the explanation on the basis of sweeping generalizations or vague reasons can meet our approval either. The approach adopted by the authorities below, thus, does not meet our approval. We are of the considered view that the matter is required to be remitted to the file of the Assessing Officer for adjudication de novo in the light of our observations above, in accordance with the law, by way of a speaking order dealing with specific justifications for bifurcation, as may be given by the assessee, after giving a fair and reasonable opportunity of hearing to the assessee.
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