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TMI Blog2023 (11) TMI 1042X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the said decision above we are inclined to allow the claim of the Assessee qua setting off of the brought forward losses, consequently the same is allowed. - SHRI B.R. BASKARAN, AM SHRI N. K. CHOUDHRY, JM For the Appellant : Shri Atul Suraiya Nilay Jhaveri For the Respondent : Shri Surendra Kumar Meena ORDER Per N. K. Choudhry, JM: The Assessee/Appellant herein has preferred this appeal against the order dated 20.02.2023 impugned herein passed by Ld. Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, Delhi {in short Ld. Commissioner) } under section 250 of the Income Tax Act 1961 (in short the Act ). 2. In the instant case, the Assessee declared its total income at Rs. NIL , by filing its return of income on dated 28.11.2013, which was processed under section 143(3) of the Act. Subsequently, the case of the Assessee was selected for scrutiny and therefore, statutory notices under section 143(2) and 142(1) of the Act were issued. In response to which the Assessee attended the assessment proceedings and filed its submissions and details, on perusing of which the Assessing Officer (AO) observed that the Assessee being a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s holding 60% of shares and M/s Fortis Health Care Ltd was holding 40% of shares. Accordingly issue stands governed by the provisions of sec 79. XIII.4 Sec 79 is applicable here only for the reason that there has been a change in the share holding pattern in this previous year compared to AY 12-13. Details of share holding and applicability of sec 79 is there in the appellate order for AY 2012-13 (please see page 16. Table 2 of the appellate order for AY 2012-13 dtd 3/11/22. Since the taxpayer has filed a Nil Return based on the decision in the case of CIT v/s Manmohan Das and after years later in the case of Orra Fine Jewellery Pvt. Ltd v/s DCIT AO can examine sec 79 only in the year in which assessee claims set off of loses. The appellate order for AY 12-13 could be subject matter of further appeal (subject to clarification from the taxpayer). In the appellate order for AY 12-13 unabsorbed business losses were not allowed to be carried forward. The unabsorbed depreciation allowed to be carried forward is 21,77,87.812. The difference of Rs 292858569 is added back. The amount of Rs 292858569 is the unabsorbed business loss not allowed to be carried forward. The assessing offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sult, there was a change in share holding pattern between both the shareholders, i.e., the holding of FHL increased to 85%, while holding of FHHPL got reduced to 15%. The Assessee also had accumulated losses remaining to be set off as on 1.4.2011. 6.2 On the basis of change in pattern of shareholding of the Assessee company, question emerge whether the case of the Assessee is hit by section 79 of the Act and therefore the Assessee is not entitled for claiming set off of the carry forward losses against its income earned during the year . 6.3 We observe that in the case pertaining to AY 2012-13, the then Assessing Officer rejected the claim for setting off of brought forward losses by holding that the Assessee is not entitled to carry forward and set off of accumulated losses available with the Assessee as on 31.3.2011 as the aforesaid change in shareholding pattern between two shareholders, would be hit by provisions of section 79 of the Act, which bars carry forward of losses, if any, if there is a change in shareholding pattern as mentioned in section 79 of the Act. 6.3.1 The Ld. CIT(A) affirmed the said decision of the then AO. 6.4 The Assessee being aggrieved pref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdingly, the learned AR contended that the tax authorities are not justified in applying the provisions of sec. 79 of the Act to the facts of the present case and in rejecting the claim of set off of brought forward losses. 7. The Learned DR, on the contrary, submitted that the provisions of section 79 of the Act will be applicable if there is a change in the voting pattern of the persons who beneficially held shares of the company. Accordingly learned DR submitted that it is necessary to ascertain the beneficial ownership in the years in which loss was incurred and 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. Hiranandani Healthcare Pvt. Ltd. 4 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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