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TMI Blog2022 (11) TMI 577X X X X Extracts X X X X X X X X Extracts X X X X ..... h is at the option of the assessee. Thus the DCF method adopted by the assessee for determining the Fair Market Value of shares as per Rule 11UA does not requires any interference. Therefore the additions made u/s. 56(2)(viib) are not sustainable in law and the Ld. CIT(A) correctly deleted the same. Thus the Grounds of Appeal raised by the Revenue are devoid of merits and the same are hereby rejected. - ITA No. 2339/Ahd/2018 - - - Dated:- 14-10-2022 - Shri Waseem Ahmed , Accountant Member And Shri T. R. Senthil Kumar , Judicial Member Appellant by : Shri V. K. Singh , Sr. D. R. Respondent by : Shri Tushar Hemani , Sr. Adv. Shri Parimalsinh B. Parmar , A. R. ORDER PER : T.R. SENTHIL KUMAR , JUDICIAL MEMBER : - This appeal is filed by the Revenue against the order dated 20.09.2018 passed by the Commissioner of Income Tax (Appeals)-8, Ahmedabad, as against the Assessment order passed under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) relating to the Assessment Year (A.Y) 2013-14. 2. The brief facts of the case is that the assessee is a company engaged in the business of trading of SS Scrap, Rod, Plates etc; which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer. Though A.O. stoutly objected admission of additional documents, the Ld. CIT(A) held that the assessee was prevented by reasonable cause to furnish the Valuation Report to the A.O. However the Valuation Report is a basic document required to decide the issue. Therefore the same was entertained as additional document. Further the Assessing Officer earlier rejected the Valuation Report submitted by the Chartered Accountant on the ground the same was not prepared by a Merchant Banker or Chartered Accountant, when no defect as regards to the projection submitted by the assessee. Furthermore, this additional document namely the report has been prepared as far the method prescribed by Technical Guide for valuation by the Institute of Chartered Accountant (ICAI). After considering the Valuation Report, the Ld. CIT(A) deleted the addition of Rs. 4,70,25,000/- made u/s. 56(2)(viib) of the Act as follows: 5.8 As regards the choice of method i.e. DCF method of valuation appellant relied upon various judgments including the judgment of Hon'ble ITAT Mumbai in the case of DCIT v. Ozone Land Agro P. Ltd. ITA No.4854/Mumbai/2016 dated 02.05.2018. In this case Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dingly, the value computed under the Rule at Rs.95.90 per share is higher than Rs. 65.31 or Rs.32.76 per share and therefore, the higher valuation has to be adopted. Moreover, It is only the Explanation (a)(ii) speaks of 'the satisfaction of the AO but there appears no such condition in the Explanation (a)(i) which therefore AO is not permitted to interfere in the valuation, once done in accordance with the method prescribed in the Rule 1UA(2). For the reasons stated above, we find no justification behind rejecting the declared valuation of the shares and in the impugned addition made by the AO but partly sustained by the CIT(A), which is hereby deleted. 5.9 In view of the aforesaid facts it has to be held that appellant has issued the shares at the Fair Market Value determined by Chartered Accountant following the DCF method as prescribed in Rule 11UA of the Rules. No infirmity on the merits of the report has been found by the AO as well as by the undersigned. Therefore, it has to be held that the shares have been issued at the premium according to the fair market value. Hence, the additions made u/s.56(2)(viib) of the Act amounting to Rs.4,70,25,000/- made by the AO are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Rules admitted the additional evidences filed before him and deleted the share premium of Rs. 4,70,25,000/- made by the Assessing Officer as not sustainable in law rules framed there under. In support of its claim the ld. Senior Counsel also placed on record the Bombay High Court judgment in the case of Vodafone M-Pesa Ltd. vs. PCIT reported in [2018] 92 taxmann.com 73 wherein it is held as follows: 9. We note that, the Commissioner of Income-Tax in the impugned order dated 23rd February, 2018 does not deal with the primary grievance of the petitioner. This, even after he concedes with the method of valuation namely, NAV Method or the DCF Method to determine the fair market value of shares has to be done/adopted at the Assessee's option. Nevertheless, he does not deal with the change in the method of valuation by the Assessing Officer which has resulted in the demand. There is certainly no immunity from scrutiny of the valuation report submitted by the Assessee. Therefore, the Assessing Officer is undoubtedly entitled to scrutinise the valuation report and determine a fresh valuation either by himself or by calling for a final determination from an independent valuer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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