Rule 60 — Amalgamation carry-forward

Rule 60 sets the conditions for carrying forward or setting off accumulated loss and unabsorbed depreciation after an amalgamation under section 116(4)(b)(iii): 50% of installed capacity within four years, held until the end of five years, certified in Form No. 29, with Central Government power to relax.

Conditions (sub-rule 1).

(a) The amalgamated company, owning an industrial undertaking of the amalgamating company by way of the amalgamation, must (i) reach production of at least 50% of the undertaking's installed capacity before the end of four years from the date of amalgamation, and (ii) keep that minimum production level until the end of five years from that date.
(b) It must furnish the Assessing Officer a certificate in Form No. 29, verified by an accountant under section 515(3)(b) with reference to the books and documents showing production particulars, along with the return for the tax year in which the prescribed level is reached and for the later tax years falling within five years of the amalgamation.

Relaxation (sub-rule 2). On the amalgamated company's application, the Central Government may relax the production level, the period for achieving it, or both, in suitable cases, having regard to the genuine efforts made and the circumstances that prevented success.

Definition (sub-rule 3). "Installed capacity" means the production capacity existing on the date of amalgamation.

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