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2015 (12) TMI 1613 - AT - Income TaxDouble disallowance u/s.40(a)(ia) - prohibition of carrying forward losses u/s 79 - amalgamation - Held that:- We find that the assessee has itself disallowed and added to its income ₹ 12,30,374/- while filing the return of income on the basis of note in clause 17(f) of the tax audit report as per Table A (supra). We further note from the comparative statement of disallowance u/s.40(a)(ia) of the Act that the A.O. again disallowed and added ₹ 17,97,259/- to the income of assessee as stated in para 6 of the A.O. order, the break up of which is given in Table B (supra). The ld. CIT(A) while disposing of the appeal before him allowed relief in respect of ₹ 5,76,899/-as mentioned in Table B (Total B) meaning thereby that double disallowance in respect of ₹ 12,20,360/- (Rs.12,15,060 + 5300) as which stands added to the total income of the assessee suo motto on the basis of tax audit report. On the basis of these facts, it is apparent that the disallowance in respect of ₹ 12,20,360/- has been made twice, first by the assessee on his own and secondly by the A.O. We, therefore, delete the disallowance/addition - Decided in favour of assessee Rejection of assessee’s claim for setting off of brought forward losses - Held that:- As decided in COMMISSIONER OF INCOME TAX Versus SELECT HOLIDAY RESORTS PVT LTD. [2013 (1) TMI 187 - DELHI HIGH COURT] as during the earlier period 98% of the assessee’s share were held by IIPL the holding company, which was amalgamated with the assessee company. However, after merger of the shareholder of the IIPL continued to be shareholder in the assessee company. Thus, the shareholders beneficially entitled to 98% of the shares continued to be same. In these circumstances, prohibition of carrying forward losses placed by Section 79 does not operate. The same issue was also come up before Karnataka High Court in the case of CIT vs. AMCO Power System Ltd.[2015 (10) TMI 2385 - KARNATAKA HIGH COURT ] has affirmed the same.- Decided in favour of assessee
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