TaxTMI 
TaxTMI 
2023 (7) TMI 1325
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.... both the appeals the assessee is contesting the decision of the tax authorities in rejecting the claim for set off brought forward losses by applying provisions of section 79 of the I.T. Act. In A.Y. 2012-13 the assessee is also contesting the addition of Rs. 27 crores made under section 68 of the Act. 3. The facts relating to the case are stated in brief. The assessee is engaged in providing health care services. The shareholders of the assessee company are M/s. Fortis Healthcare Limited (FHL) and M/s. Fortis Healthcare Holdings Pvt. Limited (FHHPL). Both the above said shareholders were holding 40% and 60% of shares respectively as on 1.4.2011. During the year ending on 31.3.2012 relating to A.Y. 2012-13, the assessee issued 30 Lakhs eq....
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....any 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 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" 6. It is the contention of the learned AR that the provisions of section 79 would be applicable only if the shares of the company carrying not less than 51% of the voting power beneficially held by "certain persons" we....
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.... also in the years under consideration. 8. In the rejoinder, the learned AR explained that FHHPL is the holding company of FHL. He submitted that FHHPL holds 81.34% shares in FHL. Hence, the ultimate beneficial owner in FHL is FHHPL only. Even if the voting share of FHL is increased by denting the voting share of FHHPL, yet the same would not affect beneficial ownership, since FHHPL is the ultimate beneficial owner. Accordingly he submitted that there is no change in the beneficial voting power in the instant case, as contemplated in the provisions of section 79 of the Act. 9. We heard the rival contentions and perused the record. There is no dispute with regard to the fact the assessee company is held by two share holders, viz., FHL and ....
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....d merit in the contentions of the learned AR that the provisions of section 79 will not be applicable in the facts of the present case. Hence, we are not able to agree with the view expressed by the tax authorities that the change in individual shareholding of the shareholders would also attract provision of section 79 of the Act. Accordingly, we set aside the order passed by the learned CIT(A) on this issue and direct the Assessing Officer to allow set off brought forward losses both in A.Y. 2012-13 & 2013-14. 11. The other issue urged in A.Y. 2012-13 relates to the addition made under section 68 of the Act. We noticed earlier that the assessee has issued 30 lakhs equity share of Rs. 10/- with a premium of Rs.90/- per share, i.e., at a to....
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....cluded premium amount of Rs.90/- per share. Accordingly, the assessee contended that the premium collected by it is justified. 13. The Assessing Officer, however, did not accept the above said explanations given by the assessee. He took the view that the share premium collected by the assessee requires to be examined under the provisions of section 68 of the Act. The Assessing Officer took the view that the assessee has not offered proper explanations with regard to nature and source of share premium received by it. Accordingly he assessed the share premium amount of Rs. 27 crores as unexplained cash credit under section 68 of the Act. 14. The learned CIT(A) also took the view that the charging of premium of Rs.90/- per share, when assess....
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....scussions made by the tax authorities and assessee has boiled down to the quantum of share premium collected. 16. Under these set of facts, it is required to be examined as to whether the provisions of sec.68 could be invoked by the assessing officer? The provisions of sec.68 would be attracted when the assessee fails to prove the identity of the creditor, credit worthiness of the creditor and genuineness of transactions. The examination u/s 68 of the Act has to be with reference to the creditor who has given money to the assessee. We notice that there is no doubt in the mind of tax authorities about the three ingredients mentioned above in respect of share premium amount of Rs.27 crores collected from FHL, i.e, the AO has seems to have ac....