Shares allotted at premium based on valuation report following ...

Shares issued at premium based on DCF valuation. AO erred in rejecting report sans flaws. Arm's length subscription by reputed group.

Case Laws Income Tax

July 8, 2024

Shares allotted at premium based on valuation report following DCF method. AO rejected report without pointing errors. ITAT held valuation not an exact science, cannot be done with arithmetic precision. Shares subscribed by outside investor, a reputed corporate group, not a related party. Hence, no infirmity in CIT(A) order deleting addition u/s 56(2)(viib). Disallowance u/s 36(1)(iii) on interest expenditure deleted by CIT(A) as zero coupon debentures were consideration for transfer of assets, not investment. ITAT upheld CIT(A)'s view. Interest-free deposit given had sufficient own funds, no disallowance u/s 36(1)(iii) warranted as per Bombay High Court ruling. Assessee's appeal allowed on this issue.

View Source

← Previous Next →

Shares allotted at premium based on valuation report following ...

Shares issued at premium based on DCF valuation. AO erred in rejecting report sans flaws. Arm's length subscription by reputed group.

Case Laws Income Tax

July 8, 2024

You may also like:

Addition u/s 56(2)(viib) - income from other sources - share premium received by the assessee - discarding the DCF method of valuation of shares adopted by the assessee...

Addition on account of share premium received u/s 56(2)(viib) - AO has not examined the DCF method of valuation submitted by the assessee and the value of shares...

Taxability of share premium collected by assessee u/s.56(2)(viib) - fair market value of shares - when the assessee has substantiated share price to the satisfaction of...

Addition u/s.56(2)(vii)(b) - share premium - difference between the issue price and the actual share price determined by the AO - AO has changed the method of valuation...

Addition u/s 56(2)(viib) - Method of Valuation - share premium receipts - The Tribunal noted that the appellant had obtained a valuation report from a registered valuer,...

Income from other sources u/s 56(2)(viib) - determining the share value of the premium - Method of valuation of shares - AO did not point out any flaw in the method of...

The Income Tax Appellate Tribunal (ITAT) examined the addition made u/s 56(2)(viib) for the difference between the market value and consideration received for shares...

Addition u/s 56(2)(viib) - share capital and premium received by the assessee - method of valuation as per Rule 11U and 11UA - When shares were issued at premium based...

Valuation of shares at a premium u/s 56(2)(viib) - Keeping in view that DCF is correct method of determining the FMV of the unquoted shares, the assessee has option to...

Addition u/s 56(2)(viib) - Value of share premium received on allotment of 31248 shares - Valuation report obtained from the merchant bankers even they have issued a...

Addition u/s 56(2)(viib) - Method of valuation of shares - closely held company issues its shares at a premium - The tribunal sided with the assessee, affirming the FMV...

The ITAT considered an appeal regarding addition u/s 56(2)(viib) concerning the valuation of preference shares. The Assessee lacked a valuation report supporting the...

Addition u/s. 56[2] [viib] - method for valuation of the shares - equity and preference shares allotted by assessee to various residents at a premium - Discounted Cash...

Enhancement made by the Ld. CIT(A) u/s 251(1) r.w.s. 56(2) (viib) - AO substituted fair market value determined by the assessee through his own valuation - Assessees...

Income from other sources - difference between the fair market value and the issue price of shares at a premium as income of the Assessee - the AO can scrutinize the...

Quick Updates: