TMI Blog2024 (4) TMI 341X X X X Extracts X X X X X X X X Extracts X X X X ..... immovable property comprised of land and building which houses the rice mill. As is apparent from the AO as well as Ld. CIT(A) orders that both the authorities have failed to point out any defect in the valuation report furnished by the assessee. We note that the AO has valued the fair market value of the equity shares based on the book value which is totally incorrect and erroneous method of calculating the fair market value as the assessee owns movable as well as immovable properties valuing the equity share at Rs. 23.20 per share whereas the fair market value of the equity share was much higher. AO has not referred the issue to valuation expert and therefore the said act of AO is not acceptable as the assessee has furnished valuation be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me of Rs. 1,07,680/- which was selected for scrutiny under CASS. The statutory notice u/s 143(2) of the Act was issued to the assessee. In response thereto the counsel of the assessee appeared and submitted the tax audit report, audited accounts, list of share holders and other documentary evidences including bills, vouchers as called for by the AO. The AO observed on the basis of balance sheet the assessee has received large share premium during the year. A show cause notice was issued to the assessee regarding the said share premium which the assessee has replied on 14.12.2016 wherein the assessee has tried to substantiate the valuation of the shares as per clause (b) of Section 56(2)(viib) of the Act. The AO observed on the basis of said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he properties based on the recognized method of valuation. We note that the assessee s balance sheet is comprised of both movable and immovable properties. We note that immovable property comprised of land and building which houses the rice mill. As is apparent from the AO as well as Ld. CIT(A) orders that both the authorities have failed to point out any defect in the valuation report furnished by the assessee. We note that the AO has valued the fair market value of the equity shares based on the book value which is totally incorrect and erroneous method of calculating the fair market value as the assessee owns movable as well as immovable properties valuing the equity share at Rs. 23.20 per share whereas the fair market value of the equit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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