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2022 (2) TMI 755 - ITAT MUMBAIAddition of share premium received on issue of equity shares u/s.56(2)(viib) - whether shares have been valued by taking the growth projections during the year rather than adopting the book value of the assets? - HELD THAT:- Assessee has submitted the detailed working of the fair market value of all the assets along with supporting documents including stamp duty ready reckoner in order to substantiate the value arrived by the valuer on the date of issue of shares. CIT(A) has accepted the method adopted by the assessee and he came to the conclusion that it is at the option of the assessee to adopt the value as per explanation (a)(i) or a(ii) of section 56(2)(viib). Assessee has an option to adopt explanation a(i) or a(ii) of the Act and assessee has chosen the option explanation a(ii) to value the shares. Before accepting, the Ld.CIT(A) has given an elaborate finding in his order. it is also a fact on record that AO has not brought on record that there is any involvement of cash transaction in these transactions which goes to the main purpose of the introduction of section 56(2)(viib) and further we also noticed that shares were issued to its sister’s concern only and the transactions are between two closely held companies and it cannot be classified or equated to generations/circulations of unaccounted money. Therefore, we do not find any reason to interfere with the finding of the CIT(A) and accordingly we deem it fit and proper to dismiss the ground raised by the revenue. Disallowance u/s 14A r.w.r. 8D - HELD THAT:- The assessee has earned only ₹.3000/- as exempt income and Ld.CIT(A) has restricted the same to the extent of exempt income earned by the assessee. Therefore, the action of the Ld.CIT(A) is in line with the various judicial pronouncements which restricts the disallowance u/s. 14A of the Act to the extent of exempt income earned by the assessee. Therefore, we are inclined to dismiss the grounds raised by the revenue. Revenue appeal dismissed.
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