CBDT issues draft
notification u/s. 115JG(1) specifying the conditions to be fulfilled upon
conversion of Indian Branch of foreign bank into Indian subsidiary
company and also specifying modifications, exceptions, in applicability
of certain provisions of the Act to such conversion; Draft notification
proposes following conditions, viz. (a) all the assets and liabilities of the
Indian branch immediately before conversion become the assets and liabilities
of the Indian subsidiary Company, (b) the foreign company (engaged in banking
business in India through branch) or its nominees hold the whole of the
share capital of the subsidiary company and (c) the foreign company does not
receive any consideration or benefit, other than by way of allotment of shares in
the Indian subsidiary company; With respect to unabsorbed depreciation,
draft notification proposes that the aggregate depreciation deduction allowable
to the Indian branch and the Indian subsidiary company shall not exceed the
deduction calculated at the prescribed rates as if the conversion had not taken
place, and such deduction to be apportioned between the Indian branch and
the Indian subsidiary company in the ratio of the number of days for which the
assets were used by them; Further, it proposes that the tax credit of the
Indian branch shall be deemed to be the tax credit of the Indian subsidiary
company for the purpose of the previous year in which conversion was effected
and the provisions of Sec. 115JAA shall apply accordingly; Invites stakeholders
comments/suggestions on the draft notification by November 30th
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