Section 79 - carry forward of loss - change in shareholding pattern

[Sanjeev Sharma]

Section 79 of Income Tax Act : 60% shares of a Pvt. Ltd. Indian company 'Orange India' was held by another pvt. co. named B and balance was held by individuals. The shareholding patern of Company B was totally changed and its 100% shares was acquired by and transferred to Company C.The shareholding pattern of Orange India has , however, remained the same. Will the losses of Orange India will be allowed to be carried forward u/s 79 ??

AI Summary

Change in Company B's Ownership Doesn't Affect Orange India's Loss Carry Forward Under Section 79 of Income Tax Act. Section 79 of the Income Tax Act concerns the carry forward of losses in the context of changes in shareholding. In this scenario, 60% of shares in 'Orange India' are held by Company B, which underwent a complete change in its shareholding when acquired by Company C. Despite this change, Orange India's shareholding remains unchanged. The response clarifies that since Orange India is a subsidiary of Company B, the change in Company B's ownership does not affect Orange India's ability to carry forward losses under Section 79, as the shareholding pattern of Orange India itself has not changed.