TMI Blog2013 (10) TMI 1568X X X X Extracts X X X X X X X X Extracts X X X X ..... urse of scrutiny assessment proceedings the Assessing Officer noticed that the assessee has set off brought forward losses. The Assessing Officer further noticed that there was a change in the share holding pattern of the assessee company. The Assessing Officer was of the firm belief that the claim of the set off of brought forward losses is in contravention of the provisions of section 79 of the Act. The Assessing Officer sought explanation from the assessee as to why not the set off of brought forward loss be disallowed in the year under consideration. The assessee filed a detailed reply. The relevant part is exhibited at page 3 4 of the assessment order. The Assessing Officer accepted the contention of the assessee to adjust the unabso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact remain that there was a change of the shareholding pattern. 51% or more of the equity share was not held beneficially be person who beneficially held shares of the company carrying not less than 51% of voting power on the last day of the year in which the loss was incurred. There is no concept of presuming that the company is not a separate legal entity and can be construed to be same as that of an individual or for the matter a shareholder. The company is an artificial juridical person as defined in Section 2(31) of the Act. Therefore, the assessee s contention that the shareholding pattern has not changed cannot accepted, the provision of section 79 are clearly applicable to the facts of the appellant case. Aggrieved, by this the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er consideration and during the year of losses. Sr. No Name of the shareholder % of shareholding in F.Y. 06-07 (A.Y. 07-08) % of shareholding in F.Y. 06-07 (A.Y. 07-08) 1 Shailesh Sangani 10% 12.6% 2 Joel Cardoso 10% 0.4% 3 Priority Marketing Pvt. Ltd. 80% 3.2% 4 Manisha Sangani 0% 48.8% 5 Alefiya Khorakiwala 0% 14% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... now holds 48.8% of the shares. It is the say of the counsel that by virtue of shareholders agreement dated 14.10.2005, which is exhibited at pages 45 to 64 of the paper-book, the share holding remained within the group and, therefore, the beneficial holding did not change. We do not find any force in this contention of the counsel. It is settled proposition of law that a company is a distinct legal entity and its identity is separate from the identity of its share holders/members. Let us take an example. X Ltd holds 51% shares in Y Ltd., this does not mean that the share holders of X Ltd hold 51% shares in Y Ltd. because X Ltd, Y Ltd and the share holders are all distinct and separate persons. In the case under consideration Priority One M ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
