Issue/Justification
In case, where the shares of a company are transferred in distressed condition, the rule 11UA/11UAA prescribing the method to determine the FMV would not provide the correct FMV of shares.
The said Rules do not provide the method to value the shares of a company sold/transferred in distressed condition.
Suggestion by ICAI for Budget 2018
It is therefore suggested that in case where the shares of a company are transferred in distressed condition, the FMV as determined by the merchant banker or an accountant as defined in Rule 11U shall be considered.
