Companies Transferee Company
(For every 100 equity shares of Rs. 10 each) (Fully paid up equity shares of Rs. 10 each)
Transferor company ... negative net
worth, hence the value of their shares is taken as zero. Therefore, no shares
will be allocated to the shareholders of transferor company
Service P. Ltd., Hyderabad.
transferred their shares to the assessee on 04.03.2011 at
Rs.75.49 per share whereas, on the same day and also ... fair market value as per the prescribed rule
according to which, the fair market value of the share is
less than Rs. zero and hence
appreciation in the value of
shares, the mode of payment for purchase of shares not doing the
transaction through the normal share dealing procedures ... benefit.
F) PENNY SHARE:
The shares in which the assessee has claimed to have made a
deal, are identified as Penny Shares by the investigation
investment company and inter alia to
purchase, to invest and to acquire shares/other securities. The company is
also getting interest income and rental income ... towards write off of
investment value as revenue expenditure. This was on account of investment
turning zero in the share of Modi Creata Promotion
market leader and had over 66% of the market share (in
both volume and value) whereas ITC had only 1.8%. He pointed out that
Britannia ... complaint before ASCI was dismissed, it decided to introduce Nutri
Choice Digestive Zero biscuits. It is pointed out that the complaint was
IA No. 10139
materials in production or due to writing
down the value of inventory to Zero between the interval of 31/8/2007 and
26/9/2007 ... 2007,as it had no
realisable value. And such write-off / writing down in the value to Zero on
26/9/2007 itself was strictly
carry forward long term
capital loss on sale of equity shares on which SIT was paid
against the long term capital gain ... disclosed at zero in column 3e of Part B of schedule CG relating to
long term capital gains. This figure of zero in-respect
entire dispute revolves
around the charging of share premium of Rs. 490/- per share on a book
value of Rs. 10/- each. This dispute ... beyond any logical
reasoning that a company with zero balance sheet could garner Rs. 490/-
per share premium from its subscribers. Such transaction may raise
business, the ld. CIT(A) was of the
opinion that the preference shares will remain investment even in substance.
The ld. CIT(A) accordingly disallowed ... even otherwise, the
assessee is entitled to value its securities at Nil when the recoverable value is
Zero. It is the contention
fair market value
of the asset on the date of such transfer shall be deemed to be
the full value of the consideration received ... such conversion or treatment ;
or
(iva) the maturity or redemption of a zero coupon bond; or
(v) any transaction involving the allowing of the possession
