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issue of share at premium
One of my client (Pvt. Ltd. Co.)issue share Face Value 10 and on Rs. 90 Rs. Premium . co. is a private limited company and it is newly formed. Now ITO Want justification For Rs. 90 premium per share . If you have any case law or justification please provide me.
Replies (1)
Pawan..
ITO shud concern wid only those matters which can be added to the income.. I dont think that he can ask for Premium Justification.. but i know that we cant object him practically..
So if u don't get any case law on this, then i suggest u to prepare an statement in which projection of future profit is incorpoarted n set ur EPS in such a way so that EPS*P/E Ratio will be equal to Rs 100 approx.. this way u can justify him...
I think, premium justification is just a tool for him for negotiation (i think u get my point)..
Adarsh
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