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2021 (4) TMI 436 - ITAT CHANDIGARHRevision u/s 263 - CIT directing the AO to tax the amount which is in excess of its FMV as income from other sources on receipt basis - A.O. computed the FMV of shares in accordance with Rule 11(U)(b) of the Income Tax Rules, 1962 on the date of issue of shares holding that as per Explanation 2 of Section 56(2) (viib) the FMV of share shall be the value on the date of issue of share and added the same to the income of the assessee under the head income from other sources - assessee challenged the assessment order before the Ld. CIT(A) inter alia on the ground that the AO has invoked section 52(2) (viib) on the receipt of consideration against issue of shares since the assessee had not received amount in the impugned year but in the earlier year no addition could be - HELD THAT:- The coordinate Bench in M/S FRED ENTERPRISES PVT. LTD., [2020 (6) TMI 745 - ITAT CHANDIGARH] holding that the provisions of section 56(2)(viib) of the Act are triggered in the year in which the shares are issued. Therefore, the impugned order passed by the Ld. PCIT, directing the AO to tax the amount which is in excess of its FMV as income from other sources on receipt basis, is contrary to the findings of the coordinate Bench. As per the settled law, the jurisdiction u/s 263 of the Act can be exercised on satisfaction of twin conditions that the order passed by the AO is erroneous and prejudicial to the interest of the Revenue. In the present case since the AO has passed the assessment order in accordance with the decision of the coordinate Bench rendered in the case discussed above, the same cannot be termed as erroneous within the meaning of section 263 of the Act. In our considered view since the order passed in the present case is in consonance with the findings of the coordinate Bench, the Ld. PCIT has wrongly exercised the revision powers u/s 263 and directed the AO to tax the amount excess of its fair market value under the head income from other sources on receipt basis. Hence, we hold that since the order passed by the A.O. is not erroneous, the Ld. PCIT has wrongly set aside the same by exercising jurisdiction u/s 263. Appeal of the assessee is allowed.
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