Section 56(2)(Viia)- Receipt without cons. treated as Income

This query is : Resolved

Rahul Sharma (Querist)
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20 November 2010 if the Pvt. Ltd. company allot the share to shareholder (Cover only Indviudals) at par (i.e 10/- each) but the fair value of the each share is say 40.

Plesae advise, what is the Tax treatment in the hand of Indvidual/ Company.

There is any impact of difference b/w Rs. 10 or Rs. 40.

I am again state here share are alloted @ 10/- each instead of Rs. 40.

Kindly Advise

it's Urgent

Thanks & Regards

Rahul Sharma

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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20 November 2010 In my opinion it can be deemed as gift U/s 56(2)(vii)c in the hands of the Individual provided the fair market value of shares allotted to the Individual exceeds Rs. 50000/ from the consideration paid by him.