The airplane sustained substantial damage during a loss of control while on short final for landing during an instructional flight. The instructor pilot reported that the airplane was on downwind and was about to turn to the base leg when he pulled the power and informed the dual student that he had an engine failure (simulated). The dual student turned toward the runway, but when the airplane had just cleared some trees and was about 50 to 60 feet above ground level (agl), the dual student released the yoke and told the instructor that it was "his airplane." The instructor pilot reported that he took control of the yoke and banked sharply toward the runway. He detected a high sink rate and "called for power but none was applied." The instructor pilot reported that the airplane stalled about 20 feet agl, and contacted the runway and a snow bank. In a written statement, the instructor pilot reported, "We should have had a more positive change of command. I was wondering when he was going to add power and apparently he thought that I was flying the plane."