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2023 (1) TMI 607 - AT - Income TaxAddition u/s. 56(2)(viib) - Computation of the fair market value of the shares - whether the assessee has valued the shares as per the balance sheet of the valuation date 31.03.2014 in consonance with Rule 11U/11UA of the IT Rules? - HELD THAT:- Balance Sheet should be drawn on the valuation date, which is 31.03.2014 in the present case, which has been audited by the auditor of the company and if these two conditions are not satisfied, then the balance sheet drawn up as on the date immediately preceding the valuation date which has been approved and adopted in the Annual General Meeting of the share holders of the company, which would be 31.03.2013 in the present case. For a company, it is impossible to get it accounts audited on 31st March and present the same for approval in the Annual General Meeting on March 31st. In the case in hand, when the Bench asked the ld. counsel for the assessee about the unaudited balance sheet as on 31.03.2014, the ld. counsel for the assessee could not reply and instead, referred to the certificate of the auditors wherein nowhere says that the valuer has considered the audited balance sheet as on 31.03.2014 which was approved and adopted in the Annual General meeting by the shareholders for the simple reason that it is practically impossible for any company to present the audited balance sheet of the F.Y. before the Annual General Meeting on the date of closing of the F.Y. i.e. 31st March. The certificate of the auditors is based on the statement and documents furnished by the company which is neither audited nor certified by the auditors. Even the Legislators put the onus of proof on the companies and in the case in hand, the assessee has miserably failed in discharging the onus. AO found that the audited balance sheet of 31.03.2013 was approved by the shareholders in the Annual General Meeting and, accordingly, computed the fair market value of the shares as per the balance sheet as on 31.03.2013 which, in our considered opinion, is as per the provisions of the Act read with the relevant rules of the IT Rules and cannot be faulted with. Appeal of assessee dismissed.
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