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2020 (3) TMI 234 - HC - Income TaxDeduction u/s 80IA - Applicability of section 79 - No positive profit available for deduction after considering the losses of the previous years to be set off against the income of the current year - change in the share holding of the assessee company, as a result of which the provisions of section 79 was made applicable and the accumulated losses from the assessment years 1997-1998 to 2001-2002 lapsed - HELD THAT:- It is clear that the burden is on the Revenue to establish that any change in the shareholding was not effected with a view to avoiding or reducing any tax liability. As the Assessing Officer has not gone into this aspect at the time of assessment, at this stage, it would not be appropriate to consider the issue as to whether the shareholding was genuine or not for the purpose of computation of quantum under section 80IA( 1) for the year under consideration. Similarly in the decision in the case of Ganga Corporation Asbestos Pvt Ltd [2014 (5) TMI 153 - ALLAHABAD HIGH COURT] issue whether business of the assessee had remained the same or whether there was cause of unity of control and common management. Such a issue is not arising from the facts of the case, reliance placed by the Revenue for the alternative submission is not required to be considered. When there is no issue of any strict or otherwise literal construction of the provisions of the Act, the application of section 80IA( 5) of the Act to deny the effect of provisions of section 79 of the Act cannot be sustained as per the Scheme of the Act,1961. When the loss of earlier years have already lapsed, then the same cannot be notionally carried forward and set off against the profit and gains of the assessee's business for the year under consideration in computing the quantum of deduction under section 80IA( 1) of the Act, 1961. The provision of section 80IA( 5) cannot be invoked to ignore the provisions of section 79 by virtue of which the business loss of the assessee prior to year 2001-2002 has already lapsed. Assessing Officer, CIT(Appeals) and the Tribunal were therefore, not justified in applying section 80IA( 5) of the Act so as to ignore the losses which have already lapsed by operation of section 79 - Appeals are allowed.
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