Development agreements require legal possession or effective enjoyment for capital gains transfer; permissive possession and deferred consideration de...
Prolonged sterilisation of development rights supports capital-gains treatment, while business-income disallowances cannot govern capital-gains comput...
Additional evidence in transfer pricing dispute leads to fresh examination, while tax deductions, TDS credit, fee and refund interest require verifica...
Category II AIF pass-through taxation preserves non-business income character; investment receipts cannot be reclassified without applying recognised ...
Mutual fund maturity rules require proper rollover, redemption, disclosure, and due diligence; investor gains cannot excuse regulatory breaches or pen...
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Conversion of loan into share capital attracts provisions of Section 56(2)(viib) of the Income Tax Act. The term 'consideration' used in the section has wide implications, including non-monetary transactions. Conversion of loan into equity does not exempt the assessee from Section 56(2)(viib). The fair market value (FMV) of shares must be determined using prescribed valuation methods like discounted cash flow or net asset value consistently. Significant fluctuations in share premium within a short period without justification indicate undervaluation, attracting addition u/s 56(2)(viib) for excess premium over FMV. The assessee's contentions regarding non-applicability of Section 56(2)(viib) and lack of valuation rules were rejected. The Appellate Tribunal upheld the addition made u/s 56(2)(viib) for excess share premium over FMV.
Conversion of loan into share capital attracts provisions of Section 56(2)(viib) of the Income Tax Act. The term 'consideration' used in the section has wide implications, including non-monetary transactions. Conversion of loan into equity does not exempt the assessee from Section 56(2)(viib). The fair market value (FMV) of shares must be determined using prescribed valuation methods like discounted cash flow or net asset value consistently. Significant fluctuations in share premium within a short period without justification indicate undervaluation, attracting addition u/s 56(2)(viib) for excess premium over FMV. The assessee's contentions regarding non-applicability of Section 56(2)(viib) and lack of valuation rules were rejected. The Appellate Tribunal upheld the addition made u/s 56(2)(viib) for excess share premium over FMV.
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