capital gain share transfer

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swaminathan (Querist)
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05 January 2010 dear all
compay X is a private limited. it has 5 share holders the share holders wanted to distribute the share within them self so taht individual share holding is less than 10%. they are going to transfer the share at cost price between them.

1) Whether capital gain will come for this transaction
2) Since the cost price and sale price is same whether AO invoke sec 55A at the time assessment

kindly help on this

Sudhindra

Sudhindra (Expert)
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06 January 2010 If there is no difference between the cost of transfer and the sale consideration the capital gains would not arise and once the captila gain is nil then tax on that nil gains will be always nil, hence no capital gains arisies., unless the transfer would have at a price other than the cost, then the question of loss or profit would have arisen..

swaminathan

swaminathan (Querist)
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06 January 2010 whether sec 55A will be invoked by assessing officer kindly answer to this question also

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