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Purchase of the entire set of shares

Tax planning 553 views 1 replies

Karthik.K

Articled Assistant

44 Points Joined December 2008

A NBFC is having accumulated losses for the purpose of Income tax. A few set of people want to buy the entire set of shares from the existing shareholders. In that case, it is possible for the company to claim the accumulated business loss and the accumulated depreciation losses in the future years.

If it is not possible to claim these losses, is there any other way by which the loss could be claimed given that those set of people need to acquire the entire set of shares of NBFC??

Kindly read the provisions of Sec 79a of Income Tax Act, 1961 and tell me a possible solution.

Replies (1)

Priyanka

Chartered accountant

371 Points Joined September 2007

First of all, Section 79 comes in force only if share holders as on 31.03.2009 are different as compared to 31.03.2010. that is on the last day of previous year in which loss is incurred and on the last day of previous year in which loss is going to be set off. u r going to set off accumulated loss of 31.mar 2009 on 31.mar 2010.

u r saying that shareholding is going to changed means not changed yet....shareholdings as on march 09 and march 10 r same.... so section 79 will not applicable to u for this return of AY 10-11. U CAN CLAIM ALL LOSS AND DEPRECIATION.

section will come in picture for AY11-12 coz share holdings on march 10 & march 11 will differ. that time also u can claim unabosorbed depreciation....sec 79 is applicable only for buisness loss

write for further doubts or with further details so i can varify and read section agin...but according to me this interpretation is correct...