Section 56(2)(vii)(c) not applicable to bonus shares: ITAT

JCIT Vs Sh. Bhanu Chopra (ITAT Delhi) The only issue involved in the instant case relates to acquiring of bonus shares and applicability of the provisions of section 56(2)(vii)(c) of the Act to the same. It was held by the Tribunal that allotment of bonus shares cannot be considered as received for an inadequate consideration and therefore, it is not taxable as income from other sources u/s 56(2)(vii)(c) of the Act. Further, the issue of bonus share is by capitalization of its profit by the issuing company and when the bonus shares are received it is not something which has been received free ...