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2022 (12) TMI 456 - ITAT MUMBAIAddition u/s 56 (2) (viia) - difference in the consideration paid towards receipt of the shares by the assessee and Fair Market Value of the equity shares of such investee companies as per Rule 11Ua of the I.T. Rules ,1962 - HELD THAT:- As fairly evident that under the head liabilities, there was a clear cut liability disclosed in the balance sheet in the form of redemption of preference shares. Section 11UA provides that the book value of the liability shown in the balance sheet has to be reduced for the purpose of valuation and determination of FMV of unquoted equity shares AO has erroneously taken the balance sheet as on 31st March 2010 without taking note of the fact that the balance sheet as on the date of valuation date, i.e,. the date on which shares were transferred or received by the assessee. The liability was reflected in the balance sheet post dated 31st March 2010. If the liability as on the date of allotment is taken into consideration, then the valuation submitted by the assessee is correct and therefore, the AO has completely erred in law and on facts not taking into consideration. The liability disclosed in the balance sheet as noted above while valuing the FMV of the shares of both the companies has to be reduced and accordingly, CIT (A) has rightly deleted the additions made by the AO. Therefore, the order of Ld. CIT(A) is confirmed and the addition is directed to be deleted. Appeal filed by the revenue stands dismissed.
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