TaxTMI 
TaxTMI 
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 ??
Section 79 - carry forward of loss - change in shareholding pattern
11 Apr 2010 
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Carry forward of losses depends on continuity of shareholding in the loss-making company, not on holding-company ownership changes.
Carry forward and set-off of losses require continuity of shareholding in the loss-making company itself; a change in ownership of its holding company does not, by itself, restrict carry forward of losses where the subsidiary's shareholding pattern remains unchanged. The controlling inquiry is whether persons holding shares in the loss-bearing company have changed, not whether the holding company's shareholders have altered. (AI Summary)
Carry forward and set-off of losses require continuity of shareholding in the loss-making company itself; a change in ownership of its holding company does not, by itself, restrict carry forward of losses where the subsidiary's shareholding pattern remains unchanged. The controlling inquiry is whether persons holding shares in the loss-bearing company have changed, not whether the holding company's shareholders have altered. (AI Summary)
