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purchase of warrants

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(Querist)
15 April 2010 Is sec 56(2)(vii) is applicale to indiviual on purchare of warrants convertible into equity shares of a listed company.
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Bhaskaran Chackrapani Warrier

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Bhaskaran Chackrapani Warrier (Expert)
15 April 2010 Purchase means consideration is passed from buyer to seller. Section 56 takes care of transacions without/inadequate considertion. So the cited issue is out of the purview of section 56(2)(vii).
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LEENA

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LEENA (Querist)
15 April 2010 But how to ascertain consideration is aqueduate or not if warrants are infrequently traded. However the book value of equity shares of company is very high. Is there is any method to ascertain fair value.
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LEENA

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LEENA (Querist)
15 April 2010 But how to ascertain consideration is aqueduate or not if warrants are infrequently traded. However the book value of equity shares of company is very high. Is there is any method to ascertain fair value.
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Bhaskaran Chackrapani Warrier

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Bhaskaran Chackrapani Warrier (Expert)
15 April 2010 Notification No. 23/2010 dated 8 April 2010 issued by the CBDT prescribed the rules for determining the FMV, for the purposes of taxation, of certain specified assets received by a taxpayer without consideration or for inadequate consideration. Pl go through the same.
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