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TMI Blog2012 (6) TMI 211X X X X Extracts X X X X X X X X Extracts X X X X ..... t:- It is noticed that the contention now raised before us has been taken for the first time. Since additional evidence as well as this argument were admittedly not before the authorities below , we are of the considered opinion that it will be in the fitness of things if this aspect is sent back to the AO for taking a fresh decision after considering all the relevant material - Decided partly in favor of assessee for statistical purposes. X X X X Extracts X X X X X X X X Extracts X X X X ..... was advanced that the case of the assessee was covered within the meaning of proviso to section 79 which makes the mandate of the provision inapplicable where the shares were inter alia transferred to any relative of the shareholder by way of gift. It was stated that the shares were exchanged in the nature of cross gifts between the members of the Tainwala family. The Assessing Officer required the assessee to provide the details of shares gifted along with documentary evidence like registered gift deed, copy of balance sheet of persons giving and receiving gifts. No such detail was furnished by the assessee. Considering these facts, the Assessing Officer refused to allow set off of brought forward business loss amounting to Rs. 64.11 lakh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally interested. In other words, this section applies to the companies which are closely held. The mandate of the provision is to disallow the amount of brought forward business loss against the income of a later year if there is change in the shareholding pattern of more than the prescribed percentage. This section provides that : "Notwithstanding anything contained in this Chapter, where a change in shareholding 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany are assets of the shareholders, except in the case of its liquidation and that too, to the extent of the amount remaining after the discharge of outside liabilities. If the shareholders of the company are treated as one and the same thing as is a company, then the very concept of separate legal entity comes to naught. A person is said to be a beneficial owner of shares when they are held by someone else on his behalf, meaning thereby that the registered owner is different from the actual or the beneficial owner. Where the shares are not so held by one for and on behalf of another, the concept of beneficial ownership cannot be invoked. In the case before us, it is M/s Concept Reality & Securities Limited which held shares of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of section 79, the A.O. was not competent to forbid the set off of the brought toward business loss for A.Y. 1998-99 against the business income for the current year because the so called change in the shareholding pattern took place in an earlier year and not the previous year relevant to the assessment year under consideration. In support of this argument, he filed some additional evidence to demonstrate that the change took place in an earlier year. On a pertinent query from the Bench, it was fairly conceded that this argument was not specifically taken before the lower authorities. He however accentuated that it, being a legal issue, can be taken up at any stage of the proceedings. 8. It is noticed that the contention now rais ..... X X X X Extracts X X X X X X X X Extracts X X X X
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