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Issue of Bonus Shares

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(Querist)
23 November 2010 Can Bonus shares be issued at Premium?
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CMA. CS. Sanjay Gupta

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CMA. CS. Sanjay Gupta (Expert)
23 November 2010 No Bonus Shares can not be Issued at premium. Issue of bonus shares by the capitalisation of profits or reserves Proviso to section 205(3) stipulates that profits or reserves of a company may be capitalised by issuing fully paid-up bonus shares or paying up any amount for the time being unpaid on any shares held by the members of the company.

Bonus shares can also be issued utilizing the securities premium collected in cash. So Logically, how can bonus shares be issued at premium.
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