In a ruling that carries significant implications for corporate restructuring transactions, the Mumbai bench of the Income Tax Appellate Tribunal (ITAT) recently held that a resulting company in a demerger cannot claim the carry-forward of accumulated losses and unabsorbed depreciation if the consideration shares are issued by the holding company rather than the subsidiary that actually receives the business—a structuring choice increasingly common in group reorganisations, but one that tax tribunals are now signalling comes with a real cost.