Sec 56(2)(vii) /56(2) (viia)

Dear Sir,

Sec 56(2)(viia) of the Income Tax Act,1961 is applied only if the following conditions are satisfied:

1) Recipient is a firm or the closely held companyin.

2) The asset is which is received is in the form of of shares in the closely held company

3) These shares are received from the any person.

4) Such shares are received without consideration or for an inadequate consideration.

5)Such shares are not received by way of merger , amalgamation etc.

So,provision of Sec 56 (2)(viia) will apply only if all above condition are satisfied accordigly you are requested to check your case and if conditions are satisfied then sec will apply otherwise section will not apply!!