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TMI Blog2021 (12) TMI 1284X X X X Extracts X X X X X X X X Extracts X X X X ..... es that the balance sheet referred to therein need not be available on the date of valuation simply because the balance sheet as drawn up on the valuation date and audited by the auditor of the company cannot be practically available as on the date of valuation itself. We are, therefore, of the considered view that the balance sheet drawn up as on 31/03/2013 was rightly taken by the Assessing Officer as well as the ld. CIT(A) for the determination of the FMV of the shares sold by the assessee on 15/07/2013 as per Clause (b) of Rule 11U for the purpose of sub-rule (2) of Rule 11UA being the balance sheet drawn up immediately preceding the valuation date. In that view of the matter, we uphold the impugned order of the ld. CIT(A) on this is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer by applying Rule 11UA of the Rules @ ₹ 8/- per share and difference between the sale consideration of 10,00,000 shares received by the assessee and the FMV determined by him by applying Rule 11UA amounting to ₹ 20,00,000/- was added by the Assessing Officer to the total income of the assessee u/s. 56(2)(viib) of the Act in the assessment completed u/s. 143(3) of the Act vide order dt. 27/12/2016. 3. The addition of ₹ 20,00,000/- made by the Assessing Officer u/s. 56(2)(viib) r.w.r. 11UA was challenged by the assessee in the appeal filed before the ld. CIT(A) and the following contention was mainly raised on behalf of the assessee during the course of appellate proceedings before the ld. CIT(A) in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .03.2013. The A/R of the appellant in his submission has submitted that the shares were allotted on 15.07.2013. The audited balance sheet for the year March, 2013 was prepared on 25.07.2013. However, the Assessing Officer drew up the valuation based on the Balance Sheet as on 31.03.2013, which on the date of allotment was not available or prepared. The assessee valued the shares on the basis of Balance Sheet as on However he claims that Assessing Officer did not take cognizance of the valuation report provided by the assessee and calculated the value as on despite of the fact that such Balance Sheet was not available as on the date of allotment and as such could not have been considered. There is no merit in the submission of the appellant. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sferred. Though the amendment came to effect from 01.04.2018, from the definition of valuation date, it is the clear that the intention of the legislature was to take the date of transfer as the valuation date. As discussed above, it is clear that the date of valuation of unquoted shares would be date the shares transferred or allotted. In this case, the shares were allotted on 15/07/2013. Therefore, it would be reasonable to assume that fair market value as calculated by the AO on 31.03.2013 can be safely taken to be fair market value of unquoted shares instead of the fair market value as on 31.03.2012 taken by the appellant. The addition of ₹ 20,00,000/- is confirmed. Aggrieved by the order of the ld. CIT(A) the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 224 of the Companies Act, 1956 (1 of 1956) and where the balance-sheet on the valuation date is not drawn up, the balance-sheet (including the notes annexed thereto and forming part of the accounts) drawn up as on a date immediately preceding the valuation date which has been approved and adopted in the annual general meeting of the shareholders of the company; and (ii) in any other case, the balance-sheet of such company (including the notes annexed thereto and forming part of the accounts) as drawn up on the valuation date which has been audited by the auditor appointed under section 224 of the Companies Act, 1956 (1 of 1956);] 6. The ld. Counsel for the assessee has contended that the balance sheet of the assessee comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sel for the assessee has contended that the same cannot be taken for the purpose of valuation of shares under Rule 11UA and the balance sheet as on 31/03/2012 should be taken into consideration. It is however observed that there is nothing either in Rule 11UA or even in the definition of 'balance sheet' given in Clause (b)(i) of Rule 11UA to show that the balance sheet drawn as on the date immediately preceding the valuation date should have been approved and adopted in the AGM of shareholders of the company before the date of valuation. It, therefore, follows that even if the balance sheet as drawn up on 31/03/2013 had been audited, approved and adopted in the AGM of the shareholders of the company after the date of valuation, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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