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TMI Blog2013 (1) TMI 187X X X X Extracts X X X X X X X X Extracts X X X X ..... erroneous. It is not the revenue's case that an entirely different set of employees or establishment was kept or necessitated for earning such income that income was part of the composite income reported by the assessee which included other heads as sale of investments, sale of securities etc. Applicability of Section 79 - Held that:- As during the earlier period 98% of the assessee's shares were held by IIPL. The holding company was amalgamated with the assessee company. However, the shareholders of that holding company i.e. IIPL continued to be shareholders of the assessee company itself. The shareholders beneficially entitled to 98% of the shares continued to be the same. In these circumstances, the prohibition from carrying forward ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .1,13,76,728/- u/s 14A. The assessee's appeal to the Commissioner was partly accepted in the sense that the latter determined the disallowance to be 33% of the total expenses (which was Rs.1,14,17,833/-). The revenue's appeal was rejected by the Tribunal. It is contended that the Tribunal and the Appellate Commissioner fell into error in adopting a methodology which is not supported in law. Counsel points to the fact that almost 99% of the assessee's income and activity pertains to tax free income/interest generated and in these circumstances the quantum of disallowance i.e. 33% of the total expense was inadequate. 2. This Court has considered the submissions. Apart from the fact that the appellate commissioner and the ITAT have concurren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... two companies prior to merger as well as the directors on the Board of merged company. It remained in the same hands. Thus, the Ld. Commissioner of Income Tax (Appeals) is correct in holding that change in more than 51% was due to merger in two companies. There was no change in the part of the Ld. Commissioner of Income Tax (Appeals)'s adjudication wherein he has referred the Circular No.528 dated 16.12.88 and considered the case of the present merger as akin to death of shareholder. He also held that in the case of death of a living person the shares held by him get transferred to his legal heirs. Similarly when existence of a company is legally finished, the benefit of assets held by it (including shares of other company) will pass on to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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