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2023 (8) TMI 1116 - HC - Income TaxDetermination of fair market value of unquoted shares - Difference in value of the shares purchased by assessee - AO had valued the subject shares at Rs. 45.72 per share, albeit, by taking into account Rule 11UA of 1962 Rules, which was operable on the date when the order was passed - HELD THAT:- It is not in dispute that the formula prescribed in Rule 11UA of the 1962 Rules underwent a change, which resulted in the fair market value of unquoted shares being calculated by, inter alia, taking into account, inter alia, the value of assets such as immovable property, which was adopted by “any authority of the government” for the purposes of payment of stamp duty. If immovable property, such as land, had to be taken into account in arriving at the Fair Market Value of unquoted shares by adopting the formula prescribed in Rule 11UA of 1962 Rules w.e.f. 01.04.2018, i.e., AY 2018-19, AO would have to factor in the value of such land, by taking into account the circle rate prevailing in the area. It is this error which the AO committed, i.e., applying the formula contained in Rule 11UA of 1962 Rules, which was not applicable to the AY in issue, i.e., 2014-15. This error continued upto the stage of CIT(A). The error was corrected by the Tribunal via the impugned order.
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