Applicability of Sec 56 (vii) , Income Tax

[MANOJKUMAR KABRA]

 An existing private ltd company  issuing further shares to only few existing shareholder at face value.?? 

Weather this attracts Sec 56(vii) ? 

Posts / Replies

[Rama Krishana]

The provisions do not talk about the face value. It talk about the fair market value. In general as I understand, fair market value may not be more than fair market value in case of ongoing company.

The income is taxable which is in excess of fair market value. It is a question of facts. But, you have fair chance to prove your side.