No Price Paid for Acquiring Bonus Shares: ITAT dismisses Valuation of Bonus Shares u/s 55 (2)(aa)B of Income Tax Act

The Bangalore bench of the Income Tax Appellate Tribunal dismissed the valuation of bonus shares under Section 55(2)(aa)B of the Income Tax Act, as the taxpayer admitted to not paying any price for acquiring them. The tribunal observed that the provision under Section 55(2)(aa)B(iiia) applies when financial assets are allotted without any cost, rendering the cost of acquisition as 'Nil'. \r

Applying sub-clause (i) of clause (b) would make sub-clause (iiia) redundant. Additionally, it noted the distinction between 'other capital assets' under Section 55(2)(b) and bonus shares specifically under Section 55(2)(aa)B. The bench found no merit in the arguments presented by the A.R. and dismissed all grounds of appeal raised by the assessee, upholding the dismissal of the appeal.