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(b) "unabsorbed depreciation" means so much of the allowance for depreciation of the 'amalgamating cooperative bank or the demerged cooperative bank, as the case may be, which remains to be allowed and which would have been allowed to such bank as if the business reorganization had not taken place.

It is not disputed that that Bobbili Bank got merged with assessee-bank is done as per the approval of RBI and Registrar of Co-operative Societies. Even then the allowance of brought forward losses/unabsorbed depreciation are covered by provisions of I.T.Act and not by RBI guidelines. As per sub- section (7) of section 72AB, the accumulated losses would have been entitled to carry forward and set off under the provisions of section 72. Similar is the case with the unabsorbed depreciation. Therefore, the main condition which needs to be fulfilled is that the said loss should have been allowable in the hands of Bobbili Bank as per the provisions of the Act. The fact which is undisputed is that M/s.Bobbili Bank prior to its merger has never filed its return of income and thus its loss is not otherwise eligible to be carried forward under the provisions of section 72. Therefore this condition is not fulfilled the acquirer bank is not eligible to carry forward the said losses/unabsorbed depreciation as per the provisions of section 72AB. Therefore as observed by AO, Bobbili Bank, whose losses ae rio: determined as per the provisions of Income-tax Act, 1961, does not satisfy the conditions laid down by the Act. Therefore AO rightly disallowed the amortization of losses claimed by the assessee. Coming to the decisions cited by the assessee it can be observed that all these (The Visakhapatnam Co-op Bank Ltd.) decisions pertain to the assessment years prior to insertion of section 72AB w.e.f.01.04.2008. Coming to the issue of RBI guidelines with regard to amortization of losses it has been already discussed in the previous paragraphs while dealing with the allowance of provision for bad debts that the specific provisions of Income-tax Act override the general provisions of cooperative society's act/RBI guidelines. In view of the specific provisions of Income-tax Act the assessee is not eligible to the allowance of brought forward losses or unabsorbed depreciation of Bobbili Bank either in amortized form over a period of five years or otherwise. Therefore I uphold the disallowance made by AO". 8.5 I find that the facts and issues raised in this assessment are identical to the issues resolved in A.Y.2008-09 and A,Y.2009- 10 except for the fact that for the subject year the loss related to the acquisition of Ramachandrapuram and Ongole banks. I am in agreement with the above decision taken for A.Y.rs.200809, A.Y.2009-10 & A.Y. 2010-11 and accordingly I am of the view that the AO is justified in disallowing amortization loss on account merger of R.Ch.Puram and Ongole Banks. Accordingly, this ground is dismissed."

"9. We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. The first argument raised by the assessee in respect of claim made by the assessee of Rs. 1,56,70,500/- as amortized loss on account of the merger of Bobbili branch with the assessee. In the course of the assessment proceedings, the A.O. has asked the assessee what is the basis for the claim. Before the A.O., the assessee is not able to justify in respect of claim made by the company as per the provisions of section 44DB & 72AB of the Act. The A.O. has disallowed the same and added back to the total income of the assessee. On appeal, it was submitted before the Ld. CIT(A) that the merger of Bobbili bank with the assessee bank is as per the guidelines issued by the RBI, therefore, this loss has to be allowed. The Ld. CIT(A) by considering the RBI guidelines, he has observed that the Income Tax Act has a specific provision embedded for computing the deductions in the case of business re-organisation of Cooperative banks. Section 44DB of the Act deals with the details of such computation in the case of deduction under sections 32, 35D, 35DD or 35DDA of the Act. Similarly, section 72AB deals with the carry forward and set off of accumulated losses and depreciation in the case of business re- organization of the cooperative banks. He has observed that as per sub-section 7 of section 72AB of the Act, the accumulated losses would have been entitled to carry forward and set off under the provisions of section 72 of the Act, similar is the case with (The Visakhapatnam Co-op Bank Ltd.) unabsorbed depreciation. Therefore, the main condition which needs to be fulfilled is that the said loss should have been allowable in the hand of Bobbili branch as per the provisions of the Act. The Bobbili bank never filed its return of income, thus, its loss is not otherwise eligible to be carry forward under the provisions of section 72 of the Act and he confirmed the order passed by the A.O. We find that the Bobbili Cooperative bank has not filed any return of income. The assessee also not brought anything on record to show that the Bobbili bank has filed the return of income. Once the Bobbili bank which is merged with assessee's bank not filed any return of income, as per the provisions of section 72AB of the Act, the Bobbili bank is not eligible to carry forward any losses or unabsorbed depreciation. The same cannot be allowed in the hands of the assessee's case. The Ld. CIT(A) correctly by considering the provisions of the Act disallowed the claim made by the assessee. So far as RBI guidelines with regard to the amortization of losses is concerned, in view of the specific provision provided by section 72AB of the Act, in our opinion, RBI guidelines cannot prevail over the Income Tax Act. We further observed that business losses and unabsorbed depreciation of amalgamating co-operative bank i.e. Bobbili Co-operative bank can be set off against the income of successor co-operative bank i.e. amalgamated co-operative bank (assessee) if the amalgamation is within the meaning of section 72AB of the Act. In the present case, the amalgamating company i.e. Bobbili Co-operative bank not filed return of income as required u/s 72AB of the Act. Therefore, the claim of the assessee cannot be allowed. We find that the Ld. CIT(A) has correctly decided the issue and disallowed the claim of the assessee.

10. So far as alternative ground raised by the assessee is concerned, according to the Ld. Counsel for the assessee, the excess of liabilities over the assets of Bobbili bank should be treated as the price paid for acquisition of a commercial/business asset which is a depreciable asset and it has to be treated as a goodwill. We find there is no merit in the argument of Ld. Counsel for the assessee. Goodwill means it is an intangible asset that arises as a result of acquisition of one company by another for a premium value. In this case, the assessee has not paid any amount to amalgamating company. The assessee has only taken losses of amalgamating company i.e. Bobbili Co-operative bank. Therefore, the assessee has not acquired any goodwill. The Ld. CIT(A) by considering the entire facts of the case has passed a detailed order by considering the provisions of law. In so far as case laws relied upon by the Ld. Counsel for the assessee (The Visakhapatnam Co-op Bank Ltd.) particularly in the case of Cosmos Co-operative Bank Limited (supra) is entirely different facts and circumstances, therefore, we find no application to the facts of the present case. In so far as other case laws relied by the Ld. Counsel for the assessee also decided in a different facts and circumstances and therefore, we find no application to the facts of the present case. We find no reason to interfere with the order passed by the Ld. CIT(A). This ground of appeal raised by the assessee is dismissed."