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TMI Blog2018 (2) TMI 1274X X X X Extracts X X X X X X X X Extracts X X X X ..... the shipping agents of Non-Residents ship owners - Held that:- as per the CBDT Circular No. 723 dated 19/09/1995 payment made to the shipping agents of Non-Resident ship owners does not require deduction of tax at source. We further note that the Director International Taxation vide Certificate dated 23/06/2011 and 28/03/2013 respectively granted the exemption to the Non-Resident ship owners in question from deduction of tax at source. The assessee filed these certificates which are placed at page no. 13 and 14 of the paper book. Therefore, when the Department has already granted the exemption certificate to the Non- Resident ship owners then there is no obligation on the assessee to deduct tax at source in respect of the payment made to the shipping agents of these Non-Resident ship owners. Claim of entry tax disallowed on the ground that the assessee has not furnished any proof of payment - Held that:- We find that the E-challan dated 26/4/14 for sum of ₹ 1,37,635/-contains the details of assessee i.e. its name as well as address. The assessee has clarified that this amount of ₹ 1,37,635/- includes ₹ 1,35,313/- as entry tax and balance as interest. The AO ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ked to assessee to furnish the name and complete details of the investors and confirmation with copy of ITR, copy of bank statement etc. for verification of identity, creditworthiness and genuineness of transaction. In reply, the assessee submitted that the share application money in question was received in the Assessment Year 2011-12 and therefore the provision of Section 56(2)(vii)(b) are not applicable in respect of this amount received. This provision has come into force with effect from 29/01/2012. The assessee has also submitted valuation per equity share computed on the discounted cash flow method as per the certificate of Chartered Accountants wherein the value per shares was arrived at ₹ 54.98 per share. The AO did not accept the said valuation and had applied Net Asset Value of the company which came to ₹ 26.69 per share. Applying the said value the AO made addition of ₹ 66,55,000/- u/s 56(2)(vii)(b) of the Act. The assessee challenged the action of the AO before the Ld. CIT(A) and contended that as per Rule 11UA of IT Rules, the Fair Market Value of unquoted equity shares shall be the value, on the allotment date, of such unquoted equity shares as dete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e with the method prescribed under Rule 11UA of the IT Rules and as per sub-Rule (2) of Rule 11UA, discounted cash flow method is one of the prescribed method. Therefore, it is the option of the assessee to adopt any of the prescribed method under Rule 11UA(2) of the IT Rules Section 56(2)(vii)(b) read with Explanation has specifically provided that the fair market value of the unquoted shares shall be determined as per the prescribed methods and shall be taken whichever is higher fair market value by comparing the value based on the asset of the company. Therefore, the Net Asset Value method as well as any of the other methods prescribed under Rule 11UA of the IT Rules, whichever is higher shall be adopted as per the option of the assessee. 4.1 In view of the statutory provisions giving options to assessee to adopt any of the methods which can be compared with the Net Asset Value Method and the AO shall adopt the value whichever is higher. In the case of the assessee the Fair Market Value determined as per the discounted cash flow method at ₹ 54.98 per share which is higher than the valuation adopted by the AO as per the Net Asset Value at ₹ 26.69 per share. Therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at page no. 13 and 14 of the paper book. Therefore, when the Department has already granted the exemption certificate to the Non- Resident ship owners then there is no obligation on the assessee to deduct tax at source in respect of the payment made to the shipping agents of these Non-Resident ship owners. Accordingly, we do not find any error or illegality into the order of the Ld. CIT(A) qua this issue. 6. Now, we take Assessee s Cross Objection i.e. C.O. No. 36/JP/2017 wherein the assessee has raised the following grounds of Cross objection. 1. That the Ld. AO grossly erred in making addition of ₹ 1,35,313/- by disallowing the provision of entry tax and the Appellate Authority erred in sustaining the same. 2. That Respondent-cross objector craves liberty to raise additional ground and to modify/amend the ground of appeal at the time of hearing. 6.1 Only issue raised by the assessee is regarding disallowance of entry tax. 6.2 We have heard the Ld. AR as well as Ld. D/R and considered the relevant material on record. The Assessing Officer disallowed the claim of entry tax of ₹ 1,35,313/- on the ground that the assessee has not furnished any p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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