As per section 79 of the income tax if there is change in 51% voting power as compared to previous year losses cannot be carried forward.
In the Accounting year 2006-07 the company has got loss of 1 crore-The company share capital is 500000 and Mr X is holding 70% and Mr Y is holding 30%.
In the year 2007-08 the share capital is increased to 2500000 and issued 2000000 to Mr z-Due to that the shareholding is changed to Mr x-14%, MrY-6% and Mr z 80%
Can we say change in share holding because if increase in capital will attract sec 70 and loss of year 2006-07 not to be carried forward-
Any case laws are there
regards
joseph
CAclubindia
