Law:

Section:

Section 79, read with sections 32 and 33 of the Income-tax Act, 1961 - Losses - Carry forward and set off of in case of certain companies - Assessment years 1965-66 and 1966-67 - Entire share-holding of assessee company was acquired by other company - At that time assessee company had carried forward unabsorbed business losses, carried forward unabsorbed depreciation and carried forward unabsorbed development rebate - Tribunal had recorded finding of that motive in acquiring shares of assessee company by other company was not to reduce or avoid tax liability - Whether provisions of section 79 could be applied to quantum of business losses which had been allowed to be carried forward after set off in assessment proceedings of assessment year 1964-65 - Held, yes - Whether in view of fact that development rebate reserve was not created in year of installation of plant and machinery, development rebate could not be allowed in relevant assessment year - Held, yes - Whether provisions of section 79 could not apply to unabsorbed depreciation allowance - Held, yes Words and phrases : Words "and so on" occurring in section 72(1)(ii). FACTS The assessee was a public limited company having a textile mill. On 14-12-1961, its entire shareholding was acquired by other company. At that time the assessee company had carried forward unabsorbed business losses, unabsorbed depreciation and unabsorbed development rebate. For the assessment years 1965-66, and 1966-67, the ITO held that the provisions of section 79 were applicable to the assessee. The AAC confirmed the order of the ITO. Before the Tribunal, the assessee contended that as the Department failed to invoke the provisions of section 79 in the assessment year 1962-63, the Department had lost the right to apply the provisions of that section in subsequent years. The Tribunal accepted this contention of the assessee. The second contention of the assessee was that even assuming that the carry forward and set off of the loss should be denied even during the assessment years 1965-66 and 1966-67, it should be restricted to the business loss only, and should not apply to unabsorbed depreciation and unabsorbed development rebate.…

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