Dear Members,
There is a private limited company which has incurred substantial losses till 31.03.2008. During 2008-09 it has earned substantial income to set off the loss of earlier years. However during the year 2008-09, 50% of the shares held by a person is transferred to another person.
Section 79 of the IT Act states that loss of earlier year cannot be set off if the share holding pattern has changed. In the present case, the pattern has not changed in case of persons having less than 51% (as referred in Section 79).
Please guide as to whether the loss of earlier years can be adjusted in case of scenario explained above by the company.
Regards/Dharmaraju
CAclubindia
