9911796707
TMI Blog2019 (5) TMI 836X X X X Extracts X X X X X X X X Extracts X X X X ..... assailing the order of the CIT(A) has raised before us the following grounds of appeal:- 1. That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition of Rs. 2,80,00,000/- made by the AO under section 53(2) (viib)(a)(i) of the Income Tax Act, 1961. 2. The Ld. CIT(A) has erred in ignoring the AO's finding that the assessee failed to produce supporting evidence to substantiate the method of valuation adopted by him. 3. The Ld. CIT(A) has erred in ignoring the fact that the AO had specifically asked the assessee to file supporting evidence with regard to "Discounted cash flow" method adopted to value shares, vide order sheet entry dated 17.03.16, which is a specific show cause in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the date of issue of shares was made available by the assessee, therefore, the A.O due to lack of information calculated the FMV of the shares, as under:- CLOSING (31.03.2013) (Without considering New Issue) OPENING (01.04.2012 Capital 2100000.00 100000.00 R&S 19648303.00 (76359.00 Total 21748303.00 23,641.00 Less New Capital (2000000.00) Sec. Premium (28000000.00) (-)(8251697.00 No. of Shares (Existing) 10000 10000 Value per share Rs. Nil Rs. 2.36 As observed hereinabove, the value of the shares of the assessee company was worked out by the A.O as per Rule 11UA r.w.s. 56(2)(viib) as on 01.04.2012 and 31.03.2013 at Rs. 2.36 and Nil, respectively, which was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (i) the book value method; or (ii) discounted cash flow method. Apart there from, it was observed by the CIT(A) that now when the method adopted by the assessee was accepted by the A.O in the immediately succeeding year i.e. A.Y 2014-15, therefore, there was no justification on his part in adopting an inconsistent view and treating the share premium of Rs. 2,80,00,000/- as the income of the assessee for the year under consideration. On the basis of his aforesaid deliberations the CIT(A) finding merit in the appeal of the assessee deleted the addition of Rs. 2,80,00,000/- made by the A.O. 5. The Revenue being aggrieved with the order of the CIT(A) has carried the matter in appeal before us. The learned Departmental Representative (for sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ideration for issue of shares that exceeds the face value of such shares, the aggregate consideration received for such shares as exceeds the fair market value of the shares shall be chargeable to income tax under head "Income from other sources". As per the Explanation to section 56(2)(viib) of the IT Act, the FMV of the shares shall be the value as may be determined in accordance with the method envisaged in Rule 11UA of the Income tax Rules, 1962 or as may be substantiated by the company to the satisfaction of the AO, based on the value on the date of issue of shares of its assets, including intangible assets being goodwill, know how, patents, copyrights, trademarks, licenses, franchises or any other business or commercial rights of simi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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