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CAPITAL GAIN ON SALE OF UNLISTED SHARES

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Querist : Anonymous

Querist : Anonymous (Querist)

24 March 2010 OUR COMPANY IN BUSINESS OF REAL ESTATE.IT IS UNLISTED COMPNAY. IF ONE OF THE SHAREHOLDER HAVING AROUND 98% SHARES OF THE COMPANY SOLD 50% SHARES TO THE RELATED GROUP COMPANY AT PAR. ON THE BASIS OF CAPITAL HOLDING, LONG TERM CAPITAL GAIN IS THERE.BUT WHETHER INTRINSIC VALUE WILL BE CONSIDERED FOR CALCULATING SALE CONSIDERATION. IN CASE OF SCRUTINY ASSESSMENT, WHETHER THIS QUESTION MAY BE ARISED OR NOT ?
ALSO PROVIDE CASE FOR THE SUPPORTING PURPOSE.
PLEASE REPLY AS EARLY AS POSSIBLE
ITS URGENT

CA Vijay Kumar Gupta

CA Vijay Kumar Gupta (Expert)
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24 March 2010 NO, THE RELATED AMENDMENT IN SEC.56 IS WEF 1-05-2010

Aditya Maheshwari

Aditya Maheshwari (Expert)
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25 March 2010 The capital gain will be calculated by taking the sale consideration as received less the cost of purchase

However if the buyer is an individual then if the purchase price of the buyer is less than the intrinsic value of the shares and it exceeds Rs. 50,000/- then the same will be taxable u/s 56 in the hands of the buyer

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