Rajeev (CA) (30 Points)
24 October 2008Hi I would like to know if:
x has rendered services to a company y and the company y wants to repay that creditor by way of issusance of shares then
is the company x liable for capital gains if any
is the company y liable for capital gains if any
Rajeev
A J Sankar
(CA FINAL)
(312 Points)
Replied 24 October 2008
| Originally posted by :Rajeev | ||
| " | Hi I would like to know if: x has rendered services to a company y and the company y wants to repay that creditor by way of issusance of shares then is the company x liable for capital gains if any is the company y liable for capital gains if any Rajeev |
" |
To arise capital gain there should be a "transfer of capital asset"
so from the point of the person service rendered he has not transfered any capital asset so no question of Cap Gain
where as when company is alloting shares to such person then there is also no transfer of capital asset(allotment not amount to transfer). so no capital gain
hence in my point of you there is no capital gain/loss for both.
caution !!!!!!!!!!!!! it is only with my little knowledge. There may be another wise answer
S.Srinivasaraghavan
(Chief Financial Officer and Co)
(11318 Points)
Replied 24 October 2008
Where is the question of capital gain in the case of shares issued in exchange for equivalent amount of creditors.
madhur gupta
(student/article )
(1022 Points)
Replied 24 October 2008
there is no capital question of capital gain
but u must note whether co.y has fulfilled all the requirements regarding issuance of shares...............
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