TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Assessee wins right to set off brought forward losses despite shareholding changes under Section 79</h1> <h3>Hiranandani Healthcare Pvt. Ltd. Versus Commissioner of Income Tax (Appeals) /National Faceless Appeal Centre, Delhi</h3> Hiranandani Healthcare Pvt. Ltd. Versus Commissioner of Income Tax (Appeals) /National Faceless Appeal Centre, Delhi - TMI Issues Involved:1. Disallowance of brought forward losses adjusted against income.2. Applicability of Section 79 of the Income Tax Act, 1961.Summary:Disallowance of Brought Forward Losses:The Assessee declared its total income as 'NIL' for the assessment year, which was processed under section 143(3) of the Income Tax Act. The Assessing Officer (AO) disallowed the Assessee's claim of setting off brought forward losses against the income of Rs. 37,09,306/- due to a change in the shareholding pattern during the previous assessment year (AY 2012-13). The AO's decision was based on Section 79 of the Act, which bars carry forward of losses if there is a change in shareholding pattern. The Ld. Commissioner affirmed the AO's decision but directed the AO to verify the correct figures of carry forward business losses.Applicability of Section 79:The core issue was whether the change in shareholding pattern of the Assessee company was hit by Section 79 of the Act, thereby barring the set off of carry forward losses. The Assessee argued that the shareholding was between M/s. Fortis Healthcare Limited (FHL) and M/s. Fortis Healthcare Holdings Pvt. Limited (FHHPL), and the change in shareholding pattern was within the same group of shareholders. The Tribunal observed that the provisions of Section 79 would not be applicable if the 51% voting power was held by the same group of persons in both the years of incurring losses and the years of setting off losses. It was noted that FHHPL is the holding company of FHL, and thus, there was no change in the beneficial ownership.Tribunal's Decision:The Tribunal concluded that the change in individual shareholding between FHL and FHHPL did not attract the provisions of Section 79. Therefore, the Assessee was eligible to set off the brought forward losses. The decision of the lower authorities was reversed, and the appeal was allowed in favor of the Assessee.Final Order:The appeal filed by the Assessee was allowed, and the order was pronounced in the open court on 30-08-2023.
TaxTMI 