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TMI Blog2009 (9) TMI 623X X X X Extracts X X X X X X X X Extracts X X X X ..... , they were found to be words which can be understood as happening both prior and after coming into force of the statute, as it was understood from the words “if a person has been convicted” to include anterior conviction. In Explanation 1, the present tense is used with an injunction that the shares “are not beneficially held by the persons who hold the shares in company”. The present tense cannot be assumed to describe the status of the shareholder as the owner, but the status of the shares which are beneficially held. On this interpretation the language of the section can only be understood to describe "the date on which the undertaking was set up" as applicable only for those who are setting up the undertaking after the new provision, s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in the accounting period relevant to the assessment year 1997-98 and is enjoying deduction of its profits and gains as are derived by the undertaking as provided under section 10A of the Income-tax Act, 1961 ( the Act ). There was a change in the shareholding pattern of the company which has been reproduced by the Assessing Officer in the assessment order reading as under : Shareholding pattern as on March 31, 1998 Name of the shareholder No. of shares of Rs.10 face value Shareholding (%) Voting power (%) Aatish Dedhia 100 50 50 Nanji Dedhia 100 50 50 Total number of shares issued by the company 200 100 100 Shareholding patte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer. Consequently, an appeal came to be filed before the Income-tax Appellate Tribunal against the order of the Commissioner of Income-tax (Appeals) whereby, the Tribunal has concurred with the findings of the Commissioner of Income-tax (Appeals) and disallowed the exemption by invoking the provisions of section 10A(9) of the Income-tax Act. Aggrieved thereby, the appellate jurisdiction of this court is invoked by the appellant under section 260A of the Act for consideration of substantial question of law framed in the opening part of this judgment. Submissions 5. Learned counsel for the appellant submits that the provisions of section 10A(9) read with Explanation 1 are not applicable to the facts of the case because shar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 10A(1) of the Act. 8. So far as question (b) referred to hereinabove is concerned, learned counsel for the appellant submits that sub-section (9) of section 10A which was inserted with effect from the assessment year 2001-02 but omitted from assessment year 2004-05 would apply prospectively, i.e., the undertaking to which section 10A applies with effect from April 1, 2000. It is submitted that in sections 10A and 10B, there is a block concept for 10 years, the transfer that may forfeit relief has to be considered with reference to the last day of the previous year, when the claim for relief is made and the last day of the year in which undertaking was set up . Learned counsel for the appellant thus submits that, it is the block con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... last day of the year in which the undertaking was set up, the company shall be presumed to have transferred its ownership or the beneficial interest in the undertaking. 11. At this juncture, it would also be useful to turn to paragraph 15.9 of the Circular of the Central Board of Direct Taxes bearing No. 794, dated August 9, 2000 ([2000] 245 ITR (St.) 21, 36) which explains the insertion of subsection (9) and Explanation 1 thereto by the Finance Act, 2000 which reads as under : 15.9 Sub-section (9) provides that in case there is a transfer of ownership or the beneficial interest in the undertaking by any means, the deduction under sub-section (1) shall not be allowed to the assessee for the assessment year relevant to such previou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the result, the original promoters, i.e., Shri Aatish Dedhia and Shri Nanji Dedhia continue to hold shares of the appellant-company carrying not less than 51 per cent. of the voting power. It is thus clear that during the previous year relevant to the assessment year 2001-02 the ownership of the appellant-company was not transferred by any means and, therefore, the appellant-company is right in claiming entitlement to deduction under section 10A(1) of the Act. 14. So far as second question is concerned, one has to keep in mind the settled principle of interpretation that retrospectivity cannot be lightly inferred unless it is clearly provided for in the statute. The first proviso to section 10A implies continuity. If the intention was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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