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TMI Blog2019 (8) TMI 442X X X X Extracts X X X X X X X X Extracts X X X X ..... Income tax Act, 1961. Hence, these arguments are not relevant for the purpose of deciding these two M. Ps. because in M. P. proceedings, new issue cannot be raised. Not deciding of certain grounds - There is no merit in this claim that these grounds are not decided. The claim as per Ground No. 5 is this that the assessee can adopt any method of valuation of shares. This is admitted position of facts that the assessee adopted DCF method of valuation of shares. The assessee adopted the value of shares at ₹ 400/- per share and in support thereof, the assessee submitted a report of the valuer dated 15.11.2013. As per another report of a different valuer dated 02.02.2012, the value determined as per DCF method was ₹ 100/- per share. The AO and the tribunal did not accept the valuation report dated 15.11.2013 because this report is by the auditors of the assessee company and as per Rule 11 U (a), any Fellow member of ICAI other than the auditor can be a valuer. The earlier report dated 02.02.2012 is by an eligible Chartered Accountant and as per this report, the value determined as per DCF method was ₹ 100/- per share. Hence, it is seen that the value ultimatel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant/Petitioner. Similarly, in the M. P. filed by the assessee for A. Y. 2015 16, it is stated that the tribunal has not adjudicated Ground No. 3 5 of the Original Grounds of Appeal and Ground Nos. 1, 2 and 3 of the Additional Grounds of Appeal. 2. In the course of hearing of these M. Ps., same contentions are reiterated. In addition to this, it was submitted by the learned AR of the assessee that it is stated in para 2 on page 3 of the M. P. for a. Y. 2014 15 that the relevant provisions of section 56 in particular clause 2 of the Proviso to section 56 (2) (viib) provide for option to the assessee to adopt any method of valuation and do not provide for any discretion to the AO to change the method of valuation adopted by the assessee. He also submitted that as per clause (ii) of the proviso to clause (viib) of sub section (2) of section 56 of Income tax Act, 1961, it is provided that clause (viib) of sub section (2) of section 56 of Income tax Act, 1961 will not apply if the amount in question is received by a company from a class or classes of persons as may be notified by the central government in this behalf. He submitted as per this proviso, a Notif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs to find out whether this issue was raised by the assessee that the provisions of clause (viib) of sub section (2) of section 56 of Income tax Act, 1961 are not applicable to the assessee because I am deciding the M. Ps. and therefore, if this issue was not raised in these two appeals, the same cannot be raised in M. P. proceedings. I find that the issues raised in these appeals as per various grounds are regarding rejection of the report of valuation, adoption of value of shares at ₹ 100/- in A. Y. 2014 15 and ₹ 714.38 in A. Y. 2015 16 and regarding the adoption of valuation method and there is no such ground raised in any year about non applicability of the provisions of clause (viib) of sub section (2) of section 56 of Income tax Act, 1961. Hence, these arguments are not relevant for the purpose of deciding these two M. Ps. because in M. P. proceedings, new issue cannot be raised. 4. Now I consider and decide the issues raised in the body of these M. Ps. in respect of not deciding of certain grounds. In this regard, I find that in A. Y. 2014 15, this is the contention that in respect of section 56 (2) (viib) issue, Ground No. 5 of original grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this year, this is the contention raised that the AO cannot adopt NAV method of valuation. I find that this valuation report dated 02.05.2014 is available on pages 95 to 107 of the paper book. This valuation report is prepared by M/s Amarnath Kamath Associates, Chartered Accountants. The audited accounts of the assessee company for the year ending as on 31.03.2014 dated 30.08.2014 is available on pages 3 to 37 of the paper book and both are by the same firm of Chartered Accountants and therefore, this is not a valid report in view of Rule 11 U (a) of Income Tax Rules, 1962. In this year, the tribunal approved the action of the AO of adopting NAV as against DCF method by the assessee by observing that since no valid report of a valuer is available, the AO determined FMV of share on the basis of NAV method and taxed the excess amount received by the assessee and learned CIT (A) has confirmed such addition and in view of these facts, no interference is called for in the order of CIT (A). There is no specific discussion or decision on this aspect that whether the AO can adopt NAV method when the assessee has adopted DCF method. In this year, I find force in this claim that Ground No ..... X X X X Extracts X X X X X X X X Extracts X X X X
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