ITAT rules that Sec 56(2)(vii)(c), providing for taxation of receipt of property for inadequate consideration, applicable to ‘rights issue’ of shares, however, so long as theres no disproportionate / non-uniform allotment, no scope of property being ‘received’ on allotment, to attract rigours of Sec 56(2)(vii); Property in ‘right shares’ vests in assessee on allotment of shares, date of share certificate not relevant; Rejects assessee’s argument that ‘receipt as used in Sec 56(2)(vii) has to be equated with ‘transfer’ or ‘purchase’, no reason to restrict / limit scope of word ‘receipt’ to cases of ‘transfer’ only; Also holds that Sec 56(2)(vii) inapplicable on bonus shares as there is no receipt of any property by shareholder, there is no increase/decrease in wealth of shareholder or issuing company; Sec 56(2)(vii) not a charging provision, only an anti-abuse measure which seeks to tax understatement in consideration as income in recipients hands : Mumbai ITAT Sudhir Menon huf
Posted on: Fri, 14 Mar 2014 16:33:25 +0000
Trending Topics
Recently Viewed Topics
© 2015