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2022 (11) TMI 610 - ITAT CHENNAIAddition u/s 56(2)(viib) - share premium received - Whether share premium received by the assessee has not been utilized for the objective meant for and has been diverted for non-specified purpose? - HELD THAT:- As per the assessee, land held by the partnership firm may get roughly about Rs. 850/- crores revenue if said land is put into development. If you consider fair amount of sharing between the developer and assessee, the assessee may get anywhere between Rs. 200 to 300 crores from the projects. Since, the assessee company is having 99.97% share in partnership firm and its free cash flows, the cash flow considered by the assessee on the basis of project of partnership firm is in accordance with law. Assessee has justified allotment of equity shares with premium of Rs. 1676/- per share with the help of multiple documents, including DCF method of valuation of shares. Further, the assessee had also justified share premium with the help of independent valuer report, as per which capital held by the assessee in the partnership firm is roughly valued about Rs. 367.96 crores. The assessee has also justified cash flows with the help of MoU with M/s. Prestige Estates & Projects Pvt. Ltd. Therefore, we are of the considered view that there is no error or lacuna in the method followed by the assessee for determination of value of shares. AO without appreciating above facts has simply made additions towards share premium on flimsy grounds by assigning grounds which are not relevant to consider share premium for the purpose of provisions of section 56(2)(viib) - CIT(A) after considering relevant facts has rightly deleted additions made by the AO and thus, we are inclined to uphold findings of the learned CIT(A) and dismiss appeal filed by the Revenue.
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