Allowing the appeal of the assessee the Tribunal held that ;where holding company of assessee transferred its entire shareholding in assessee company to another subsidiary company, in view of fact that in such a case beneficial ownership of assessee-company continued to vest in its ultimate holding company, provisions of S. 79 placing restrictions in respect of carry forward and set off of losses incurred in previous years against profits of subsequent years would not apply to assessee’s case.  The Tribunal also held that the purpose of S. 79 is implicit. It seeks to curtail misuse of benefit of carry forward and set off of business losses of earlier years of a company and prohibits its availability in the hands of any new owner. In the instant case, it is manifest that no such misuse can be inferred since the beneficial ownership did not change hands. Interestingly, one may also take note of the expression ‘held’ used in section in distinction to the expression ‘owned’. Needless to say, the expression held is far more elastic to cover the situation whereby if a person is found capable of influencing the voting rights to the extent of specified percentage (51 per cent), S. 79 will not be triggered. Therefore, while the legal ownership might have changed, the ownership/control/voting power of the assessee-company continues to be beneficially held by the same owner. This inevitably means that the cause for issuance of notice under section 263 ceases to exist.  In  the absence of any change in the beneficial ownership, one is unable to comprehend the nature of enquiry sought by the Commissioner in this regard. Hence, it is held that the action of the Commissioner is devoid of sanction of law. Consequently, the order passed under section 263 by the Commissioner is required to be cancelled.( AY.2011-12)