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TMI Blog2023 (12) TMI 1393X X X X Extracts X X X X X X X X Extracts X X X X ..... own Chemicals [ 2022 (12) TMI 1552 - ITAT MUMBAI] , Hometrail Buildtech (P.) Ltd [ 2023 (9) TMI 797 - ITAT DELHI] and Nabh Multitrade Pvt. Ltd., [ 2020 (10) TMI 928 - ITAT JAIPUR] We find that the assessee valued the share amount to Rs. 158/- per share and allotted share is Rs.100 which is much less than the NAV which is not contravening of section 56(2) of the Act. Further, all the investment in equity shares are accumulated from the directors and son of director. So, the addition in related to contravening of section 56(2) is not justified. Accordingly, we set aside the appeal order. Addition u/s 68 - non-furnishing of the identity and PAN of the creditors - HELD THAT:- The assessee was unable to substantiate its claim before the revenue authorities. Accordingly, we remit back the matter to the file of the CIT(A) for adjudication afresh. - DR. M.L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER For the Appellant : Sh. Amit Kothari, CA For the Respondent : Ms. Nidhi Nair, Sr. DR ORDER Per:Anikesh Banerjee, Hon ble J.M.: Both the appeals of the same assessee were filed against the order of the ld. Commissioner of Income Tax (Appeals), NFAC, Delhi,[in brevity t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal before the ld. CIT(A). The ld. CIT(A) passed a speaking order and upheld the assessment order. Being aggrieved assessee filed an appeal before us. 5. The ld. AR submitted the written submissions which are kept in the record. The ld. AR first invited our attention in appeal order page 6, the relevant paragraph is reproduced as below: 5. Decision: Ground No.1 is disallowance of share premium worth Rs. 171,22,500/- The appellant has issued on premium of Rs. 90 per share. During the year, aggregate consideration received for such share was of Rs. 19,02,500/- and share premium of Rs. 1,71.22,500/-. The Assessing Officer as per section 56(2)(viib) held that aggregate consideration received for such share as exceeds the fair market value is to be treated income of the appellant under the head income from other sources. The Assessing Officer came to the conclusion that the appellant has received share premium of Rs. 1,71,22,5007-, which is more than the fair market value of the shares. Hence, the Assessing Officer added the amount of Rs. 1.71,22,500/- u/s. 56(2}(viib) of the Income Tax Act. Before me in the appellate proceedings, written submission has been filed. It is stated that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer is bound to follow the same unless by bringing cogent material on record, the Assessing Officer establishes perversity in the method adopted by the assessee. 15. The Hon'ble High Court of Delhi in the case of Pr. CIT v. Cinestaan Entertainment (P.) Ltd. [2021] 433 ITR 82 has held a under: 13. From the aforesaid extract of the impugned order, it becomes clear that the learned ITAT has followed the dicta of the Hon'ble Supreme Court in matters relating to the commercial prudence of an assessee relating to valuation of an asset. The law requires determination of fair market values as per prescribed methodology. The Appellant-Revenue had the option to conduct its own valuation and determine FMV on the basis of either the DCF or NAV Method. The Respondent-Assessee being a start-up company adopted DCF method to value its shares. This was carried out on the basis of information and material available on the date of valuation and projection of future revenue. There is no dispute that methodology adopted by the Respondent-Assessee has been done applying a recognized and accepted method. Since the performance did not match the projections, Revenue sought to challenge the val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t [supra], we do not find any error or infirmity in the findings of the ld. CIT(A). 17. In the result the appeal of the Revenue in ITA No. 6905/DEL/2019 is dismissed. 6.1, The ld. AR relied on Nabh Multitrade Pvt Ltd vs. ITO, 3(2), Jaipur , ITA No. 269/JP/2018 date of pronouncement-09/10/2020, relevant paragraph as follows:- Once the assessee has produced all the valuation reports based on Discounted Free Cash Flow method as well as the fair market value of the assets as on the date of issue of the shares, then this observation of the ld. CIT (A) that the assessee has failed to exercise an option of adopting the method is contrary to the record. Further, despite the fact that all the valuations are available on record, the ld. CIT (A) has again failed to give the credit to the extent of the valuation being the fair market value of the shares based on Net Assets Value method at least. Failure on the part of the ld. CIT (A) to allow the credit to the extent of the fair market value even based on the Net Assets Value method, it appears that the ld. CIT (A) was not functioning as an independent appellate authority but reflecting as an authority to collect the maximum revenue. According ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td(supra). But the order is not coming under factual matrix, Here the data supplied was incorrect and correctness of DCF method was in question. In assessee s case there is no question about the correctness of data. 8.1 We relied on the order of the ITAT Mumbai Bench in the case of Crown Chemicals, (supra), ITAT, Delhi Bench in the case of Hometrail Buildtech (P.) Ltd and ITAT Jaipur Bench in the case of Nabh Multitrade Pvt. Ltd., (supra). We find that the assessee valued the share amount to Rs. 158/- per share and allotted share is Rs. 100 which is much less than the NAV which is not contravening of section 56(2) of the Act. Further, all the investment in equity shares are accumulated from the directors and son of director. So, the addition in related to contravening of section 56(2) is not justified. Accordingly, we set aside the appeal order. Accordingly, the ground no. 2 of the assessee is allowed. 9. Ground No. 1 and 3 are general in nature. ITA No. 330/Jodh/2023 10. In this appeal, the assessee has raised the following grounds which are as under: 1. The order passed by the ld CIT(A) confirming the order passed by the Id. AO is bad in law and bad on facts. 2, a. The Id, CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f non existing asset relating to building of R.S. Petroleum, one of the relatives of the Director. The Assessing Officer made it a point that actually no construction was done but the depreciation was claimed on non existing asset. During the course of appellate proceedings before me, no details have been filed to challenge the finding of the Assessing Officer. Even in the ground of appeal, there is a reference of cheating / forgery done to the appellant and hence it has been claimed that it is an allowable expenditure. No evidence has been filed to prove the cheating or forgery to the appellant. Hence, this ground is therefore dismissed. 12. In our considered view, both the issues are not settled before the revenue authorities. The assessee was unable to substantiate its claim before the revenue authorities. Accordingly, we remit back the matter to the file of the ld. CIT(A) for adjudication afresh related both the issues. Ordered accordingly. 13. Ground nos. 3 and 4 are partly allowed for statistical purposes. 14. Ground nos. 1 and 5 are general in nature and ground no. 2 as already adjudicated above. No, need further adjudication. 15. As our observations in the Ground nos. 2, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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