OM PARKASH, J. ( 1 ) AT the instance of the Revenue, the Income-tax Appellate Tribunal has referred the following question under Section 256 (1) of the Income-tax Act, 1961 (for short "the Act"), to this court : " Whether, on the facts and in the circumstances of the case and on the true interpretation of section 79, the Tribunal is justified in holding that the provisions of Section 79 are not applicable to the facts of the present case, as no finding has been given in this case that the change in the shareholdings was effected with a view to avoiding or reducing any liability to tax ?" ( 2 ) THE assessee-company is a private limited company in which the public are not substantially interested. Its accounting period for the assessment year 1975-76 under consideration is the calendar year 1974. It claimed during the accounting period under consideration that unabsorbed depreciation and the trading loss of the assessment year 1973-74, the accounting period for which was the calendar year 1972, be brought forward and set off against its income of the assessment year 1975-76. ( 3 ) THE Income-tax Officer rejected such claim of the assessee on the ground that on account of the change in the shareholding of the assessee-company, the shares of the assessee were less than 51 per cent. on the last day of the previous year, i. e. , on December 31, 1974. The Income-tax officer, therefore, took the view that the case of the assessee came within the purview of Section 79 of the Act, as it failed to retain the requisite percentage of shares on December 31, 1974. The contention of the assessee was that disqualification within the purview of Section 79 would arise only when the change in the shareholding was made with a view to avoiding or reducing the tax liability and since there was no such intention on the part of the assessee, it would be entitled to claim set off of the loss of the assessment year 1973-74 against the income of the assessment year 1975-76. Such submission was, however, rejected by the assessing authority who was of the view that Clauses (a) and (b) of Section 79 of the Act are cumulative and concomitant and not alternative to one another. A similar view was taken by the Appellate Assistant Commissioner in appeal. Such submission was, however, rejected by the assessing authority who was of the view that Clauses (a) and (b) of Section 79 of the Act are cumulative and concomitant and not alternative to one another. A similar view was taken by the Appellate Assistant Commissioner in appeal. ( 4 ) THEN the assessee went up in appeal to the Appellate Tribunal which, relying on Italindia cotton Co. P. Ltd. v. CIT [1978] 113 ITR 58 (Bom) accepted the contention of the assessee. It found as follows : " We follow with respect, the ratio of the said decision, holding that the provisions of Section 79 are not applicable to the facts of the present cast; as no finding has been given in this case that the change in the shareholding was effected with a view to avoiding or reducing any liability to tax. " ( 5 ) THE Tribunal further recorded a finding of facts towards the end of paragraph 2 of its order as follows ; " On the face of it, the change appears to be in a bona fide manner in the normal course and section 79 is not intended to hit such cases. " ( 6 ) THE answer to the question whether or not the assessee is disqualified to claim set off of the loss of the assessment year 1973-74 against the income of the assessment year 1975-76, revolves round the true interpretation of Section 79. The Supreme Court in CIT v. Itaundia Cotton Co, P. Ltd. [1988] 174 ITR 160 referring to Clauses (a) and (b) of Section 79 held that the conditions are intended to operate as alternative to one another and if the terms of either Clause (a) or clause (b) are satisfied, the disqualification suffered by a company by reason of a change in the shareholding in the previous year, is removed and the company becomes entitled to the benefit of the provisions in Chapter VI relating to the carry forward and set off of the losses. From this authority it is therefore clear that Clauses (a) and (b) of Section 79 carve out two exceptions to section 79, which renders a company ineligible to claim carry forward and set off of the losses of the earlier years, if there is a change in the shareholding of the assessee-company. From this authority it is therefore clear that Clauses (a) and (b) of Section 79 carve out two exceptions to section 79, which renders a company ineligible to claim carry forward and set off of the losses of the earlier years, if there is a change in the shareholding of the assessee-company. The first exception as stated in Clause (a) of Section 79 is that an assessee-company will be entitled to claim carry forward and set off of the losses despite the change in the shareholding, if it retains 51% shares or more after the change. The second exception as contained in Clause (b) of Section 79 is that an assessee-company will not be deprived of the benefit of the provisions in Chapter vi in the Act, if it is established that the change in the shareholding was not done with the intention of avoiding or reducing any tax liability. The Supreme Court in Italindia Cotton Co. P. Ltd. s case [1988] 174 ITR 160 has clearly held that the two exceptions, as given in Clause fa)and Clause (b) of Section 79 are alternative to one another, meaning thereby, that if the conditions of either exception falling in Clause (a) or Clause (b) of Section 79 are established by an assessee-company, then it will not be disqualified from taking advantage of the provisions of chapter VI in the Act. The assessing authority and the Appellate Assistant Commissioner both misread or misinterpreted Section 79 and erroneously held that since the assessee-company failed to retain 51% or more shares on the last day of the previous year under consideration, it was disqualified under Section 79 to claim set off of the losses of the assessment year 1973-74. Their approach was that when the assessee-company failed to satisfy the conditions of Clause (a)of Section 79, there was no need for them to look into the conditions of Clause (b) of Section 79. The true legal position is that Clause (a) and Clause (b) of Section 79 carve out two distinct exceptions, which according to the Supreme Court are alternative to one another. If the assessee-company succeeds in establishing the requisite conditions of either exception, as stated in Clause (a) or (b) of Section 79, then the fetters created by Section 79 will be removed and the assessee-company will be entitled to claim benefit of the provisions in Chapter VI. If the assessee-company succeeds in establishing the requisite conditions of either exception, as stated in Clause (a) or (b) of Section 79, then the fetters created by Section 79 will be removed and the assessee-company will be entitled to claim benefit of the provisions in Chapter VI. That is why the assessee contended before the assessing authority and the Appellate Assistant Commissioner that it could not be deprived of the benefit of the set off under Section 79, unless the change in shareholding was held to have been made with the intention of avoiding or reducing its tax liability. No finding was recorded with regard to the second exception as contained in Clause (b)of Section 79 by the assessing authority or the Appellate Assistant Commissioner. The Appellate tribunal has for the first time recorded a finding of fact that the change in the shareholding was not done by the assessee-company with a view to avoiding or reducing its tax liability. In view of such finding of fact, the assessee-company is clearly saved by the second exception as stated in clause (b) of Section 79. To disqualify the assessee-company it is not enough to hold that it failed to retain 51% or more shares on the last day of the previous years under consideration. If the assessee-company is able to satisfy that it is covered by the second exception as provided in clause (b) of Section 79, which is independent and alternative to the first exception provided in clause (a) of Section 79, it will still be entitled to claim carry forward and set off according to the factual finding of the Appellate Tribunal that the change in the shareholding of the assessee-company was bona fide. ( 7 ) THE Appellate Tribunal having found that the change in the shareholding was bona fide, ought to have worded the question referred to this court more appropriately. The question arising from the order of the Tribunal is whether on the facts as found by the Tribunal and on the true interpretation of Section 79, the Tribunal was justified in holding that the provisions of Section 79 are not applicable to the case of the assessee. There was a slip on the part of the Tribunal in formulating the question referred to this court. There was a slip on the part of the Tribunal in formulating the question referred to this court. Had the Tribunal not given a finding of fact, which has not been and cannot be assailed, unless said to be perverse, the position would have been different. The Tribunal having found that the change in the shareholding was bona fide per se could have even refused the reference, as the finding that the change in the shareholding was bona fide, is a pure finding of fact. The assessee-company having clearly established the conditions of Clause (b) of Section 79 to the satisfaction of the Appellate Tribunal, it was rightly held by the Tribunal that the benefit of set off could not be denied to the assessee-company, as section 79 never intended to hit companies which effected change in the share holding, without any intention to avoid or reduce their tax liability. ( 8 ) FOR the above reasons, we answer the first part of the question referred to this court in the affirmative, that is, in favour of the assessee and against the Revenue. No answer need be given on the second part of the question reproducing the reasoning of the Tribunal, which is of no consequence, inasmuch as the Tribunal itself further recorded a finding of fact that the change in the shareholding was per se bona fide and that the case of the assessee-company is fully covered by the exception as stated in Clause (b) of Section 79 of the Act. No order as to costs.