Case law - loss set off

[Sarwan Agarwal]

Dear Sir, my qurrey is on Section 79 of the Income Tax Act, 1961. A Pvt. Ltd. company having three share holders say X holding 500 shares, Y holding 1000 Shares and Z holding 1500 shares on the last day of previous year on which loss was incurred. In the year of set off the same X, Y and Z held the shares but now x holds 5000 shares (increase by issue of addittioal 4500 shares)the othe holding the same nos. Now the Question is whether loss is permitted to be set off. Plz site some case law if possioble. Regds

AI Summary

Section 79 loss carryforward allowed despite increased shareholding from new share issuance by an existing shareholder.
Reply concluded that, under the provision invoked, the taxpayer meets the qualifying conditions and is entitled to carry forward the loss; the increase in one shareholder's numeric holding by issuance of additional shares while the same persons remain shareholders did not preclude loss carryforward on these facts.