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2023 (7) TMI 728 - AT - Income TaxAddition u/s 56(2)(viib) - Value of share premium received on allotment of 31248 shares - valuation done by the valuer cannot be accepted both on the reasonable and technical ground - entire value of share premium received on allotment of 31248 shares is considered in excess of fair market value of shares of ₹. 10 per share - HELD THAT:- By considering the disclaimer made in the report the AO came to the conclusion that the valuer has merely obtained the values from the assessee and carried out the valuation as per the requirement of the assessee and accordingly he rejected the valuation report with the above observation as well as the valuation report should have been obtained from the merchant banker rather than the Chartered Accountant firm. Even Ld.CIT(A) has sustained the additions as well as findings of the AO. We observe that in the first year of operation assessee has issued 31248 shares with a premium and valued by adopting one of the method approved in the Rule 11UA of the I.T. Rules. As per the facts on record we observe that assessee has selected one of the method approved in the Rule 11UA of I.T. Rules and it is supposed to get report from merchant bankers but assessee has taken the report from Chartered Accountant Firm. Except the report obtained from the Chartered Accountant Firm assessee has followed the due process of law. Since the assessee has submitted report from merchant banker which is more or less similar to the valuation report submitted by the Chartered Accountant Firm and Ld. DR made a submission that it may remit back to the file of the AO so that it can be properly verified. Even valuation report obtained from the merchant bankers even they have issued a limitations and warrantees to the valuation report. Therefore, the disclaimer of a valuer cannot be a basis for disallowing the proper allotment of shares. It is not a bar on the assessee to issue shares with a premium as per companies Act. Thus we are inclined to delete the additions proposed by the Assessing Officer. Decided in favour of assessee.
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