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2021 (9) TMI 1364 - AT - Income TaxRevision u/s 263 - As per CIT AO has passed the assessment order u/s 143(3) of the Act, without making any enquiry or verification on the issue of share premium received and applicability of section 56(2)(viiib) - HELD THAT:- From the observations of the Ld. Pr. CIT, it can be inferred that the AO has examined the genuineness of the transaction and did not find any infirmity with regard to the identity and creditworthiness of the share applicants and the genuineness of the transaction. Under these circumstances the Ld. Pr. CIT has wrongly assumed that the AO has not examined the applicability of section 56(2)(viib) of the Act. This is not a case of no enquiry. As pointed out by the Ld. Counsel, during the assessment proceedings the assessee produced the complete detail called for by the AO except the valuation report, which was produced before the Ld. Pr. CIT in compliance to his directions given during the appellate proceedings. In our considered view, the AO has passed the assessment order after examining and verifying the documents and the details furnished by the assessee.In the present case since the AO has passed the assessment order after due application of mind and after accepting the explanation given by the assessee the same cannot be termed as erroneous. Therefore, in our considered view the observation of the Ld. Pr. CIA that AO has passed the order without making proper enquiries is not factually correct, hence not sustainable. Whether Pr. CIT has wrongly rejected the valuation of shares @ ₹ 33.44? - Evidence on record do not suggest that the valuation report submitted by the assessee had been prepared without verification of the data supplied by the assessee. Hence, we do not find any merit in the contention of the Ld. DR that the Ld. Pr. CIT has rightly rejected the valuation report submitted by the assessee. We therefore, do not find any cogent and convincing reason for rejecting the valuation report prepared as per the provisions of law and the guidelines issued by the Institute of Chartered Accountants of India. Hence, in our considered view Ld. Pr. CIT has wrongly rejected the method of valuation of shares adopted by the assessee for determining the fair market value. We hold that the Ld. Pr. CIT has failed to show the twin conditions for exercising jurisdiction u/s 263 of the Act that the order passed by the AO is erroneous as well as prejudicial to the interest of the revenue. Since, the AO has passed the assessment order after conducting proper verification of the details furnished and considering the explanation given by the assessee, we find merit in the contention of the assessee that the impugned order passed by the Ld. Pr. CIT is beyond the scope of section 263 - Decided in favour of assessee.
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