TaxTMI 
TaxTMI 
2012 (8) TMI 771
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....er. 3. Facts of the case, in brief, are that the assessee is a company engaged in the manufacturing and trade of non-ferrous wires, semis, etc. The assessee company filed its return of income declaring NIL income after claiming set off of brought forward business loss and unabsorbed depreciation. During the course of assessment proceedings the AO noted that out of 7,41,200 no. of shares, 5,89,910 shares were transferred to new shareholders on 10-09-2003 which is evident from the annual return sent to ROC for the period 30-09-2002 to 29-09-2003. Based on this the AO prepared a chart of share holding as on 31-03-2003 according to which shares of the assessee company carrying more than 51% of the voting power were beneficially held by the n....
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....erested, where a change in shareholding has taken place in a previous year, then no loss incurred in any year prior to the previous year shall be carried forward and set off against the income of the previous year unless on the last day of that previous year and on the last day of the previous year in which the loss was incurred, the shares of the company carrying not less than 51% of the voting power was beneficially held by the same persons. In the instant case, the shares of the assessee company carrying more than 51% of the voting power were beneficially held by the new shareholders. Thus, the provisions of section 79 are clearly attracted. The assessee's argument that the percentage of shareholders is more than 51% even after change in....
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....ry forward of losses relating to A.Y. 2003-04 and earlier asst. years and the assessee was entitled to set off the losses against the subsequent years profits. 3. The learned CIT(A) erred in not appreciating that if at all, the provisions of section 79 were applicable, they were applicable to the asst. year in which the change in shareholding had taken place and not to the subsequent asst. years wherein there was no change in shareholding and therefore, since there was no change in shareholding in the current asst. year, the assessee company was justified in setting off the losses relating to A.Y. 2003-04 and earlier years against the profits arising in the current asst. year, i.e. 7. Learned counsel for the assessee referring ....
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....se of a company, not being a company in which the public are substantially interested, no loss incurred in any year prior to the previous year shall be carried forward and set off against the income of the previous year unless : (a) on the last day of the previous year the shares of the company carrying not less than fifty one per cent of the voting power were beneficially held by persons who beneficially held shares of the company carrying not less than fifty one per cent of the voting power on the last day of the year or years in which the loss was incurred. 24[Provided that nothing contained in this section shall apply to a case where a change in the said voting power takes place in a previous year consequent upon the death of a sh....