Transfer of unabsorbed losses

Transfer of unabsorbed losses permissible if amalgamating company in business for three or more years even if business units engaged for less than three years; Activities for setting up of  business also construed as “engaged in business”

The Karnataka High Court, while allowing set off of unabsorbed loss of the taxpayer  acquired on amalgamation, has held that unabsorbed losses pertained to the amalgamating company as a whole, and not to any division. It was the amalgamating company that should have been engaged in business for three or more years prior to amalgamation.