1. If there is any business reorganization under any law in force in Bangladesh or outside Bangladesh, the tax arising therefrom shall be determined in accordance with the provisions of this Part.

2. In case of transfer of capital assets under the scheme of amalgamation, the capital gain arising from such transfer shall not be taxable under this Act:

Provided that, if the shareholders of the amalgamating company receive any consideration other than shares of the amalgamating company under the scheme of amalgamation, the same shall be treated as taxable income and shall be taxed at the applicable rate.

3. Subject to the provisions of section 70, the amalgamated company formed under the scheme of amalgamation may adjust and carry forward the accumulated losses or unexpired depreciation allowances of the amalgamating company as its own accumulated losses or unexpired depreciation allowances in such a manner that the said accumulated losses or unexpired depreciation allowances are with the amalgamated company, from time to time, had arisen

4. The value of the capital assets of the amalgamated company formed under the amalgamation scheme shall not exceed the depreciated value of the capital assets shown in the accounts of the amalgamated company and in case of revaluation of the capital assets, no depreciation or amortization allowance shall be claimed on the revaluation surplus.

5. If, as a result of demerger, capital assets are transferred from the demerged company to the resulting company, the capital gain arising from such transfer shall not be taxable under this Act:

Provided that if the shareholders of the demerged company receive any investment other than the shares of the resulting company or if the value of the shares received from the resulting company is more than the value of the proportionate shares of the demerged company, the higher amount shall be treated as taxable income and shall be taxed at the applicable rate.

6. Subject to the provisions of section 70, in case demerger the accumulated loss or unexpired depreciation allowance of the demerged company shall be treated as the accumulated loss or unexpired depreciation allowance of the resulting company as under-

(a) any accumulated loss or unexpired depreciation allowance directly related to the undertaking transferred to the resulting company may be claimed by the resulting company as its own accumulated loss or unexpired depreciation allowance as if the accumulated loss or unexpired depreciation allowance had, from time to time, arisen with the resulting company;

(b) such accumulated loss or unexpired depreciation allowance not directly connected with the undertaking transferred to the resulting company shall be apportioned first between the demerged company and the resulting company in proportion to the holdings of the assets of any undertaking and thereafter in proportion to the accumulated loss or unexpired depreciation allowance of the resulting company against its own accumulated loss or unexpired depreciation allowances can be claimed as if accumulated losses or unrealized depreciation allowances had arisen, from time to time, with the resulting company.

7. In case of demerger, the value of the capital assets of the resulting company shall not exceed the depreciated value of the capital assets shown in the accounts of the demerged company in the year of demerger and in case of revaluation of the capital assets, no depreciation or amortization allowance shall be claimed on the revaluation surplus.

8. For the purposes of this Part—

(1) “Enterprise” means—

(a) any part of any undertaking;

(b) any unit or department of any undertaking;

(c) any full-fledged business activity; or

(d) any such assets or liabilities of an undertaking or any combination thereof constituting a business activity;

(2) “Amalgamated Company” means—

(a) any company with which the amalgamating company or companies are amalgamated; or

(b) any company formed by amalgamation of two or more companies;

(3) “amalgamation” means, in relation to a company, the amalgamation of one or more companies with another company or the amalgamation of two or more Companies in to a new company by such process, resulting in-

(a) all property of the merging company ic. before the merger shall be the operie seeenae company;

(b) immediately before the amalgamation all liabilities of the amalgamated company shall become liabilities of the amalgamated company; and

(c) in case the amalgamated company is a Bangladeshi company, the shareholders holding at least 75% (seventy five percent) of the value of shares of the amalgamated company shall be the shareholders of the amalgamated company; or in case the amalgamated company is a foreign company, in that case the shareholders of a Bangladeshi company directly or indirectly holding at least 75% (seventy five percent) of the value of the shares of the foreign company under amalgamation shall be the shareholders of the amalgamated company as a result of the amalgamation:

Provided that,—

(i) if immediately before the amalgamation any amalgamating company holds shares of the amalgamating company directly or through a nominee, 75% (seventy five percent) shall be calculated from the value of the remaining shares after deducting 75% (seventy five percent); and

(ii) if any subsidiary of the amalgamating company directly or through a nominee holds the shares of the amalgamating company immediately before the amalgamation, 75% (seventy five percent) of the value of the remaining shares shall be deducted before the calculation;

(4) “Company under amalgamation” means

(a) a company which amalgamates with another company; or

(b) a company which amalgamates with another company for the purpose of forming a new company;

(5) “demerged company” means a company any of whose undertakings have been transferred to the resulting company by demerger;

(6) “demerger” means any arrangement whereby a demerged company transfers one or more of its undertakings to a resulting company in such a manner that—

(a) immediately before the demerger all the assets of any undertaking of the demerged company become the property of the resulting company as a result of the demerger;

(b) immediately before the demerger all liabilities of any undertaking of the demerged company become liabilities of the resulting company as a result of the demerger;

(c) immediately before the demerger all the assets and liabilities of any undertaking of the demerged company are transferred to the resulting company at the value stated in the accounts of the demerged company;

(d) in case the resulting company is a Bangladeshi company, the shareholders holding at least 75% (seventy five percent) of the value of shares of the demerged company shall be the shareholders of the resulting company; or in case the resulting company is a foreign company, in that case the shareholders of any Bangladeshi company directly or indirectly holding at least 75% (seventy five percent) of the value of the shares of the demerged foreign company shall be the shareholders of the resulting company as a result of the demerger;

(e) Assets and liabilities transferred to the resulting company are transferred to the resulting company as an active business:

Provided, that—

(i) immediately before the demerger any resulting company holds shares in the demerged company directly or through a nominee, the same shall be calculated at 75% (seventy five percent) of the value of the remaining shares after deduction of 75% (seventy five percent); and

(ii) immediately before the demerger, if any subsidiary of the resulting company holds the shares of the demerged company directly or through a nominee, 75% (seventy five percent) shall be deducted from the value of the remaining shares before calculation.

(7) “Resulting Company” means—

(a) any such company to which any undertaking of the demerged company is transferred as a result of the demerger; or

(b) any resulting company formed by demerger;

(8) “Business Reorganization” means—

(a) Merger; and

(b) Demerger