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2022 (12) TMI 672 - ITAT MUMBAITDS u/s 192 on the perquisite - underreporting of value of perquisite - FMV of shares to determine the value of perquisites in respect of exercising of option under ESOP granted to the employee of the company - M/s Reliance capital had sold shares of the assessee company at the rate of ₹ 850 per share and therefore fair market value of the specified security (equity share of assessee company) should have been computed taking the market value at the rate of ₹850 per share - AO computed the quantum of perquisite and liability in terms of section 201(1) and interest under section 201(1A) - whether the fair market value of equity shares of the assessee as on the date of exercising of the option by the employee for converting the warrant into shares, as determined by the merchant banker should be adopted or fair market of equity shares should be adopted on the basis of a real-time transactions of sale of equity shares of the company? - HELD THAT:- We find that for the purpose of computing fair market value of the equity shares allotted to the employee Sh. Rajeev Samant, the assessee has followed the procedure laid down in Rule 3(8) of the Rules. Under the rules, in case of shares of unlisted company the fair market value shall be the value determined by a merchant banker. The merchant banker has also been defined in the Rules. The said rule has been reproduced by the Ld. Assessing Officer in the impugned order. It is evident that fair market value of the specified shares was to be taken as determined by the merchant banker. The assessee following above Rules, has adopted the fair market value of ₹194.15 as determined by the merchant banker. But the contention of the revenue in the grounds raised is that value as per the actual trade at the rate of ₹850 per share executed between the unrelated parties should have been adopted. No decision has been cited by DR, which could support the case of the Revenue and therefore we do not find any basis for adopting the fair market value as suggested by the DR based on an independent transaction of sale of shares of the assessee company between unrelated party. In the grounds raised before us, the Revenue has nowhere challenged correctness of fair market value determined by the merchant banker. Further, during the course of hearing, the Ld. counsel of the assessee filed a copy of the assessment order in the case of Sh. Rajeev Samant i.e. the employee director who received the said equity shares of the assessee company and submitted that no addition has been made on the issue of underreporting of value of perquisite in his hands, and thus department has accepted the quantum of perquisite in his hands. DR could not controvert this factual aspect pointed out by the Ld. counsel of the assessee, though in our opinion, any omission on the part of the Assessing Officer in the case of the recipient cannot give right to the assessee to take benefit of the said omission. - Decided against revenue.
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