TaxTMI 
TaxTMI 
2012 (11) TMI 623
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....nd of appeal at the time of hearing of appeal." 2. The brief facts of the case are that the assessee company is running Hospital under the name and style of M/s. Peoples Heritage Hospital Limited. During the assessment proceedings the position of share holder funds of the company noted by the Assessing officer (A.O.) is as under :- "Share capital as on 31.03.2007 31.03.2008 1. Share capital 1,00,00,000 25,70,000 2. Share application money - 74,30,000" 3. The A.O. further noticed that during the year shares worth Rs. 74.30 lacs were issued/ allotted to the family members of Shri Hari Kishan Pippal, i.e. Hari Kishan himself, Mr. Anish Pippal, Ms. Benu Pippal, Ms. Geeta Pippal, Mrs. Ruchita Pippal, Mr. Parvesh Pippal, Mr. Rajesh Pippal & Mr. Rajesh Pippal meaning thereby the shares of Rs. 74.30 lacs were transferred to the Pippal family during the year. The control and management of the company was also transferred to Pippal family. The A.O. further noticed that at the time of acquisition of the company, the financial position of the company was as under :- "F.Y. 2004-05 (-)29,94,643 (business loss) (-)61,75,924 (u....
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....was introduced by family of Shri Hari Kishan Pippal during FY 2004-05 and not during the year under consideration has no merit in it because that was simply share application money and no shares were allotted during that year. Simply paying the share application money does not entitle any applicant of shares to al1otment of shares unless and until the same are allotted by the company. A person who has only remitted share application money can claim no stake in the company. It is only after the shares have been allotted that an applicant who had remitted the money becomes a share holder and can participate in the affairs of the company as provided in the articles of association. The shares have been admittedly allotted during the year under consideration and more than 51% of share holding has changed. The provision of sec. 79 of the Act are clearly attracted in the appellant's case. The action of the AO in disallowing the set off of claim of brought forward losses does not call for any interference, therefore, these grounds are dismissed." 6. The assessee instead of putting his personal presence filed written submission. After hearing the ld. Departmental Representative and after....
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....eholding has taken place in a previous year in the case 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 [***] : (b) Omitted by Finance Act 1988 w.e.f. 01.04.1989. [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 shareholder or on account of transfer of shares by way of gift to any relative of the shareholder making such gift :] [Provided further that nothing contained in this section shall apply to any change in the shareholding of an Indian company which is a subsidiary of a foreign company as a result of amalgamation ....
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....res carrying 51 per cent or more of the voting power. If the change in the shareholding did not result in holding voting power of 51 per cent or it was established that the shares of the company carrying not less than 51 per cent of the voting power were beneficially held by the same persons, both on the last day of the previous year as well as the last day of the year or years in which the loss was incurred, it could be presumed that there was no change in the control over the company and the disqualification imposed on the company because of the change in its shareholding would stand removed. 10. As regards the contention of the assessee in the written submission that 72.80% of total paid up share capital was introduced by the family member of Shri Hari Kishan Pippal during the F.Y. 2004-05 relevant to A.Y. 2005-06 and not in the year under consideration i.e. A.Y. 2007-08.This aspect of the matter has been dealt with by the CIT(A) in his order holding that 72.8% of total paid share capital was introduced by family of Shri Hari Kishan Pippal during FY 2004-05 and not during the year under consideration has no merit in it because that was simply share application money and no sh....