9911796707
TMI Blog2024 (6) TMI 236X X X X Extracts X X X X X X X X Extracts X X X X ..... on of outstanding loans received in earlier years and source whereof was accepted to be satisfactorily explained into share capital, Section 56 (2) (viib) in absence of receipt of consideration, is not applicable - also held that the valuation is done by the assessee as per DCF method, which is an internationally accepted method of valuation of shares, and is a permissible methodology as per Rule 11UA (2)(d) of the Rules HELD THAT:- We are of the opinion that the orders passed by the Income Tax Appellate Tribunal as well as the CIT(Appeals), are fairly comprehensive. Both of them have concurrently found that no consideration was received by the assessee-firm for allotment of the shares, therefore Section 56 (2) (viib) of the Act would not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ners in the assessee-firm and the balances were showing as Partners Capital Account. 6. The assessee-company was having opening balance of unsecured loans as on 01.04.2017, which were converted into share capital as per agreement. 7. According to the assessee, the shares have been valued as per Discounted Cash Flow Method, prescribed in Rule 11UA of the Income Tax Rules and a Certificate was also obtained from the Chartered Accountant, as required under the Income Tax Rules. 8. The case of the assessee was selected for Limited Scrutiny under the e-Assessment Scheme. 9. Assessment was completed by the Assessing Office (Faceless), vide order dt. 12.04.2021 u/s 143(3) read with Section 143 (3A) 143 (3B) of Act, at an income of Rs. 135,36,85,45 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is an internationally accepted method of valuation of shares, and is a permissible methodology as per Rule 11UA (2)(d) of the Rules. It held that the right to select the method of valuation (NAV or DCF), is vested with the assessee, and the Assessing Officer erred in substituting the assessee s method of valuation, i.e. DCF, with his own method of valuation, i.e. NAV method, and had acted completely beyond his jurisdiction. It also held that the report of the Technical Expert is binding on the Assessing Officer, which cannot be disregarded/rejected without any cogent reasons, and the impugned addition of Rs. 202.50 crores, made under Section 56 (2) (viib) of the Act, is required to be deleted. The decision of the ITAT 13. The Revenue Depar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... projected figures and actual results available for some years. 15. It relied on the judgment of Mumbai Income Tax Appellate Tribunal in Creditalpha Alternative Investment Advisors (Pvt.) Ltd. (2022) 134 Taxmann.com 223 (Mumbai). The ITA 16. Challenging the said order, this appeal is filed. 17. The counsel for the Department-Revenue sought to contend that the orders passed by the Tribunal are not legal and proper and pressed the following contentions:- i) Whether the Hon ble ITAT is right in law and on the facts and the circumstances of the case in holding that there is no case of application of Section 56 (2) (viib) in the respondent s case where pre-existing unsecured loans of partners/shareholders were converted into equity shares at pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ares had been based upon the valuation report. The same could not be doubted by the Assessing Officer. The said finding smacks of perversity and whether it is legally sustainable or not in the eyes of law? vi) Whether the Hon ble ITAT erred in deleting the addition of Rs. 202.50 crores under the Head Income from Other Sources u/s 56 (2) (viib) of the Act on account of excess amount per share paid as premium and not allowing the Assessing Officer s decision to substitute DCF method of share valuation by NAV method in accordance with the Rule 11UA of the Income Tax Rules? 18. We are of the opinion that the orders passed by the Income Tax Appellate Tribunal as well as the CIT(Appeals), are fairly comprehensive. Both of them have concurrently f ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
