It notice for issuing shares at face value

195 views 1 replies
One of the Private Company issued shares at Par(FV) Rs.10 in year 2013. Now IT authority saying it cannot issues shares at Rs. 10 without valuation or Rs. 10 is less than actual book value. is this point valid... How should Company counter this Claim??
Replies (1)

Rule 11UA(2) clause (a) or clause (b) are the relevant poritons which prescribe for determination of fair market value or determination of valuation under an auditor's certificate of issue of shares falling under sec 56 (2)(viib) of the Act.

To invoke this section and the rule there to, to bring to tax as income the consideration for issue of shares should exceed the face value of shares.

If the consideration received is at par then this section cannot be invoked or a valuation under fair market value method or under discounted cash flow method be insisted.

In your case the issue being at par the officer is not correct in raising an objection.

Other than Sec 56(2)(viib), no other section of the act stipulates the condition put forth by the officer.

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
ARTICLESHIP 30 June 2026
Article Assistant or Paid Assistant

VIKAS VERMA & CO

New Delhi

Others

View Details
Company
ARTICLESHIP 27 June 2026
Article

SNCO

Mumbai

CA Inter

View Details
Company
ARTICLESHIP 10 July 2026
Article Assistant

N S Gokhale & Co

Thane

CA Inter

View Details
Company
20 June 2026
Assistant Accounts Manager

Fintax Professionals

Gurgaon

CA Inter

View Details
Company
ARTICLESHIP 11 July 2026
Article

SNCO

Mumbai

CA Inter

View Details
Company
19 June 2026
Accounts Executive

Getfive Advisors Pvt. Ltd.

Ahmedabad

CA Inter

View Details
Company
24 June 2026
Chartered Accountant

CA Darshita Shah & Co

Nadiad

CA

View Details
Company
06 July 2026
C.A./CA Inter OR pursuing C.A./GST/Accounts/Audit/IT - Head

Arvindkumar Maniar & Co.

Rajkot

CA

View Details