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TMI Blog2019 (2) TMI 1470X X X X Extracts X X X X X X X X Extracts X X X X ..... as per provisions of law and as per Rule 11 U and 11 UA of the IT Rules. As mentioned elsewhere the part of the share application was received in earlier assessment years but since in those assessment years shares were not allotted, therefore, the share premium could not have been examined by the Assessing Officer u/s 56 (2) (viib). Since the entire transaction has crystallized during the year under consideration which also includes the share premium of ₹ 790 per share needs to be examined during the year under consideration only. AO is directed to examine the justification of share premium as per the procedure prescribed under Rule 11 U and 11 UA of the IT Rules and decide the issue afresh after giving a reasonable opportunity of being heard to the assessee. - Decided in favour of assessee for statistical purpose. - ITA No.5933/DEL/2018, Stay Application No.67/Del/2019 - - - Dated:- 25-2-2019 - Sh. N. K. Billaiya, Accountant Member And Ms. Suchitra Kamble, Judicial Member For the Appellant : Sh. Mahesh Kumar, CA For the Respondent : Ms. Ashima Neb, Sr. DR ORDER PER N. K. BILLAIYA, AM: ITANo.5933/Del/2018 with this appeal the Ld. Counsel has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot allotted in earlier years, you have allotted share capital on premium only in this FY 2014-15 relevant to AY 2015-16. The question of examination of share premium arises only in the year in which shares issued. Your case for AY 2015-16 is selected for limited scrutiny for verification of Large share premium received during the year (verify applicability of section 56(2) (viib) and Low income in comparison to high loans/advances/investment in shares. b) You have claimed that M/s VL Estate (P) limited was investing intsalments, in this regard it is not out of place to mention here that the amount was given as share application money which is returnable without allotting the shares and cannot be treated as investments. It is clarified that once a company is making investment as share application money, the same can be returned back without allotting shares and it cannot be a reason for determining the premium for allotment of shares in subsequent years, as no shares were allotted in earlier years, Examination of basis of share premium can be verified only in the year when shares were allotted, i.e AY 2015-16. c) As shares were allotted at premium only in FY 2014-15 rele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontext is not understood, as the shares were issued in the period under consideration and rule 11 UA is applicable no other method for determining tire value of shares can be accepted. The AR of the assesse was asked vide order sheet dated 8/12/2017 to justify the share premium received as per applicability of section 56(2)(viib). No justificatory reply has been filed by the AR of the assessee. Further, the financial statements of assesse company for the A.year 2015-16, 2016-17 and 2017-18 are analyzed and following facts comes into the light. Details AY 2015-16 AY 2016-17 AY 2017-18 Revenue from operations 0 0 0 Work In progress 1,11,46,109 1,12,87,442 1,13,20,902 Short terms advances 5,34,33,673 5,35,00,000 5,36,93,463 On this basis of above figures, which are available on e-filing portal, it is seen that balance sheet and P L account has not moved at all in the direction to achieve towards t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undertaking from a venture capital company or a venture capital fund ; or (ii) by a company from a class or classes of persons as may be notified by the Central Government in this behalf. Explanation For the purpose of this clause- (a) the fair market value of the shares shall be the value- (i) as may be determined in accordance with such method as maybe prescribed ; or (ii) as may be substantiated by the company to the satisfaction of the Assessing officer, based on the value, on the date of issue of shares, of its assets, including intangible assets being goodwill, know-how patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature, whichever is higher; (b) venture capital company , venture capital fund and venture capital undertaking shall have the meanings respectively assigned to them in clause (a), (b) and clause (c) of [Explanation] to clause (23 FB) of section 10;] 10. It is true that the provision refers to consideration for issue of shares received in any previous year and it is equally true that ₹ 4.03 crores was received in A. Y. 2012-13 and ₹ 40 lacs was re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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