2023 (9) TMI 754 - ITAT DELHI

Addition u/s 56(2)(viia) - difference of the total fair market value and the total purchase consideration - AO while making the above addition, was of the opinion that shares which have been routed at Rs. 10 per share was in violation of provisions of section 56(2)(viia) - HELD THAT:- Assessee did not furnish any reliable and robust basis of valuation of such equity as per the Rules before the A.O. In the absence of any valuation as per Rule submitted by the Assessee, the A.O. carried out valuation on NAV method. It is the duty of the assessee to furnish reliable valuation determining such share premium from a qualified valuer.

Assessee had not entered into a distress transaction also though the same is not recognized in the extent scheme of Section 56(2) r.w.r. 11UA. Thus, the A.O. was well within his rights to question the valuation reports as they were not in line with the method of valuation adopted basis the assets valuation owned by the concerned entity, as detailed above. C

As assessee had not furnished any valuation as per Rules either before the AO or before the Ld. CIT(A) or before us, we find no error or infirmity in the order of the CIT(A) sustaining the addition made by the AO - Decided against assessee.

Unexplained investment - A.O. concluded that the assessee was not doing any actual purchase or sale and are mere name lender - HELD THAT:- Sundry debtors created from fictitious sale made during the AY 2014-15 has no worth and only book entry, and the fact that the assessee has not carried any business during the current year, which is corroborated by the AO from the Profit and Loss account. Apart from the same, the assessee had purchased huge investments through book entry from its opening sundry debtors without any actually receipts payment transaction routed through bank. Thus, we find no error in the orders of the authorities in making the above addition - Decided against assessee.

Expansion of scope of limited scrutiny - CIT(A) to confirm the assessment made by the A.O. by rejecting the scope of limited scrutiny having being expanded by the A.O. without prior permission is in violation of the provisions u/s 119 of the Act and the assessment is illegal and bad in law - HELD THAT:- Considering the fact that the AO has put the reasons for picking of the case for scrutiny and had sought all the replies pertaining only to the issue as per criteria for scrutiny selection, we find no merit in the ground No.6 of the assessee