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2022 (12) TMI 696 - AT - Income TaxAddition of payment of commission and claiming the same as expenses - HELD THAT:- We noted that the assessee before CIT(A) submitted the complete details in regard to payment of commission and even TDS was deducted on the above said commission. Assessee also filed agreements, details of service rendered, payment made in regard to each sale i.e., calculation of commission based on invoices of sales. Even now before us, the ld. Senior DR could not controvert the above stated fact. Hence, we confirm the order of CIT(A) deleting the disallowance. Therefore, this issue of Revenue’s appeal is dismissed. Addition u/s 56(2)(viia) - taking fair market value of buy back of shares by assessee from its holding company a company incorporated in USA, as valued by assessee at Rs.89/- per share as against fair market value adopted by AO at Rs.115.59 per share - HELD THAT:- As argued by DR, that by receiving the shares of its own i.e., buyback for a consideration less than the book value, the assessee has earned hidden asset from the parent company by giving up its right to obtain the true value of its shares transferred, we do not agree because the provisions of section 2(22)(d) r.w.s.115O of the Act would not apply in the hands of the assessee, since the shareholders have received the money in lieu of buyback of shares by assessee of the parent company. According to us, said provision would not apply in the hands of the assessee who has brought back this shares and in any eventuality, the very provision of section 2(22)(d) of the Act also craved out exception i.e., “dividend”. In our view, the assessee has not received any property being shares in a company and once, there is no property of recipient company it should be share of any other company and could not be its own share, because any share cannot become property of recipient company on buyback. In the given facts and as arguments made the assessee has earned hidden asset, we do not agree that on the issue of buyback of shares, assessee has acquired any share of any other company which would become property of the recipient company. Actually it will be reduction in capital and nothing more. Hence, we affirm the order of CIT(A) and this issue of Revenue’s appeal is dismissed.
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