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TMI Blog2024 (8) TMI 545X X X X Extracts X X X X X X X X Extracts X X X X ..... s flaw in the method of valuation adopted by the assessee and applied NAV method for valuation of shares and computed the valuation of shares at Rs. 7426/- per share - HELD THAT:- A bare perusal of provisions of section 56(2)(viib) would show that, if shares are issued on a rate exceeding the face value of such shares and the aggregate consideration received on such shares exceeds the market value of the shares, the amount that exceeds market value shall be chargeable to tax under the head Income from other sources . In the instant case, the assessee had issued shares having face value of Rs. 10/- per share at a premium of Rs. 4262.31 per share as against the market value of shares determined by the AO adopting NAV method Rs. 7426/- per sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onation application. We have examined the said application. On perusal of the same, we find that the delay in filing of appeal was not intentional, but was for bonafide reasons explained therein. The delay in filing of appeal is condoned and the appeal is admitted for hearing on merits. 3. The Revenue in appeal has assailed the order of CIT(A) on following two grounds:- 1. Whether on the facts and circumstances of the case and in law the ld. CIT(A) has erred in deleting the disallowance of Rs. 3,95,014/- made on account of proportionate interest expenditure. 2. Whether on the facts and circumstances of the case and in law the ld. CIT(A) has erred in deleting the addition of Rs. 25,09,76,959/- made on account of section 56(2)(viib) of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO. The shares were issued at Rs. 4272.31 and the fair market value of shares according to the AO was Rs. 7426/-. Thus, the provisions of section 56(2)(viib) of the Act are not attracted. Secondly, the AO could not have changed the method of valuation. The DCF is one of the approved method and is in accordance with Rule 11U 11UA of the Income Tax Rules, 1962 (in short the Rules ) 6. We have heard the submissions made by rival sides and have examined the orders of authorities below. The AO had made addition on two counts: (i) Excess payment of interest Rs. 3,95,014/- ; and (ii) Addition u/s. 56(2)(viib) of the Act Rs. 25,09,76,959/- . 7. A perusal of the records reveal that during the period relevant to assessment year under appeal, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... viib) would show that, if shares are issued on a rate exceeding the face value of such shares and the aggregate consideration received on such shares exceeds the market value of the shares, the amount that exceeds market value shall be chargeable to tax under the head Income from other sources . In the instant case, the assessee had issued shares having face value of Rs. 10/- per share at a premium of Rs. 4262.31 per share as against the market value of shares determined by the AO adopting NAV method Rs. 7426/- per share. Thus, the provisions of section 56(2)(viib) of the Act are not attracted in the present case. The AO disputed valuation of shares under DCF method which is one of the approved methods under Rule 11U and 11UA of the Income ..... X X X X Extracts X X X X X X X X Extracts X X X X
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