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Sec 56(2)(viib) application money received in 2011-12

Harshit gupta (N.A.) (41 Points)

30 May 2013  

Dear all,

The newly inserted clause treats the value of consideration over and above the FMV of shares of a Closely Help Company on issue of such shares as "Income From Other Sources". It is applicable from A.Y. 2013-14 i.e. P.Y. 2012-13.

My query is whether if the Share Application Money has been received in P.Y. 2011-12, however the alottment was done in P.Y. 2012-13; Would the section still be applicable for such allotment or would the date of receiving of consideration (share allotment money) be material and hence the provision be not applicable?


 4 Replies

CA ANU RAO (CA IN PRACTISE) (128 Points)
Replied 30 May 2013

Section 56(2)(vii b) would not be applicable in that case.Section 54(2)(viib) is w.e.f 01/04/2013 ( A.Y 2013-14 and onwards) specifically provides that any amount received in any previous year i.e from P.Y 2012-13..therefore shares were allotted in P.Y 2012-13 but the application money is received in P.Y 2011-12. Section 56 (2)(viib) does not apply

CA ANU RAO (CA IN PRACTISE) (128 Points)
Replied 30 May 2013

Section 56(2)(vii b) would not be applicable in that case.Section 54(2)(viib) is w.e.f 01/04/2013 ( A.Y 2013-14 and onwards) specifically provides that any amount received in any previous year i.e from P.Y 2012-13..therefore shares were allotted in P.Y 2012-13 but the application money is received in P.Y 2011-12. Section 56 (2)(viib) does not apply

Harshit gupta (N.A.) (41 Points)
Replied 31 May 2013

Thanks a lot Anu.. I had the same interpretation.. Was looking for clarification... The doubt is about the fact that the essence of taxation is the allotment of shares. Wont that be material for deciding taxability?

CA ANU RAO (CA IN PRACTISE) (128 Points)
Replied 03 June 2013

As per my interpretation it should not matter as to when it is allotted


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