15 April 2010
The company can sell the shares of a unlisted company below than its book value to a group co as of date and no special tax implications on the same other than STCG/LTCGs provided the buyer is a company.
After 01.06.2010 if the company sells shares of an unlisted company below than its book value to a group co the buyer of the shares will have to pay aditional tax on deemed gift u/s 56(2) if the difference between the sale price and book value is more than Rs. 50,000/-.
15 April 2010
There are also notification for valuation of unlisted shares. The same can be downloaded from https://www.caclubindia.com/forum/valuation-rules-for-section-56-78066.asp
Have a similar case recently and wanted to confirm if there is no way we can value the shares at a value following the yield methid or other method but will be forced to use the net asset value method, prescribed by the rules. Thus the earlier caselaws Like Gautam Hari Singhania (SC) and CGT vs Kusum Ben Mahadevia (SC) etc cannot be followed by us which permitted use of yield method or other suitable method.
CAclubindia
