deemed gift on purchase of shares

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This query is : Resolved

narendra khandelwal (Querist)

03 August 2009 ABC PVT LTD Co issue shares to Mr.Sharma at par. the face value of shares is Rs.10/-each.
After 8 month Mr.Sharma sold(Transfer) these shares to Mr.Gupta at Rs.2/-each.

in this transaction mr. Sharma suffered a loss of Rs.8 per share.

will this loss to mr sharma will be treated as deemed gift and will be taxable in the hands of mr Gupta.

what we will be tax implication in above transaction.

is there any changes/proposal in finance act 2009 regarding profit on purchase of shares in hands of Mr.Gupta.

is section 56(2)(vii) covers all assets whether immovable or not.

wii section 50C be also extended to movable property

let us assume that 50C be extended, but how the fair market value of shares of pvt ltd company will be calculated.

narendra khandelwal

narendra khandelwal (Querist)

03 August 2009 how the transferee i.e. mr gupta will come to know the cost of shares to (transferror)i.e. mr sharma

Aditya Maheshwari

Aditya Maheshwari (Expert)

05 August 2009 The said transactions may be taxable u/s 56(2)(vii) w. e. f. 01.10.2009.

In case of a private limited company generally the net worth / fair value of shares of the company is decided by the auditor of the company and that should be taken as the price.

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