Mr. X acquires 200 shares of a company on cum-right basis for 60,000. He subsequently receives an offer of right to acquire fresh shares in the company in the proportion of 1:1 at ? 105 each. He does not subscribe but sells all the rights for 7 15,000. The market value of the shares after their becoming ex-rights has also gone down to ? 50,000. What should be the accounting treatment in this case?

Mr. X acquires 200 shares of a company on cum-right basis for 60,000. He subsequently receives an offer of right to acquire fresh shares in the company in the proportion of 1:1 at ? 105 each. He does not subscribe but sells all the rights for 7 15,000. The market value of the shares after their becoming ex-rights has also gone down to ? 50,000. What should be the accounting treatment in this case?

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter11: Property Dispositions

Section: Chapter Questions

Problem 31P

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