Tax treatment of forfeiture of capital

Hello all

I have a client who had issued prefrence shares of Rs. 10/- each (Rs. 5/- each called up), now the shareholder is not able to pay the call money of Rs. 5/- and the company wants to forfeit the entire share capital issued to that shareholder.

My query is what will be the tax treatment of forfeited amount in the hands of the company and in the hands of shareholder and whether there is any implication under MAT of the forfeited amount in hands of company.

Please reply, its urgent.