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2024 (9) TMI 1192 - AT - Income TaxAddition u/s 68 - No documentary evidence for establishing identity creditworthiness of the investors and the genuineness of the transaction provided - addition of the entire share premium and share capital - CIT(A ) upheld the additions made by AO and enhanced income of the assessee u/s 251(1) read with 56(2)(viib) - HELD THAT - Enhancement made by the CIT(A) u/s 251(1) r.w.s. 56(2) (viib) of the Act the Ld. CIT(A) has not accepted the Valuation Report submitted by the Assessee as per Rule 11UA of the Rules. During the assessment proceedings the assessees have submitted the Valuation Report duly signed by the auditor by following NAV/DCF Method as required under Rule 11UA(2) of the Rules. The Valuation Reports are produced before us along with the paper book. Both the lower authorities have failed to follow the Rule 11UA of the Act as per which the option to choose the valuation of the shares lies with the assessee and the same is binding on the Income Tax Authorities. Assessees having the choice to opt for one of the methods enumerated in the above provision and the appellant has chosen to opt for clause (b) in most of the abovementioned cases for valuation of unquoted equity shares and based on the same the value of the share had been computed. Accordingly the new shares were issued and allotted to the investors during the captioned assessment year. During the assessment proceedings computation of Fair Market Value of shares as per Rule 11UA(2) was submitted before the Ld.AO to justify that the shares issued by the appellants were at Fair Market Value (FMV) which was computed in accordance with Rule 11UA(2) of the Income Tax Rules 1962. But the AO has not given any reasoning for rejecting the valuation of shares nor have they furnished any material to the contrary which justified the rejection of the valuation of shares. When the statute provides for a particular procedure the authority has to follow the same and cannot be permitted to act in contravention of the same. It has been hitherto an uncontroverted legal position that where a statute requires to do a certain thing in a certain way the thing must be done in that way only. Other methods or modes of performance are impliedly and necessarily forbidden. The aforesaid settled legal proposition is based on legal maxim Expressio unis est exclusio alterius meaning thereby that if a statute provides for a thing to be done in particular manner then it has to be done in that manner and in no other and following other course is not permissible. The assessees have issued the shares at fair market value computed in accordance of the rules and no err has found in the method applied by the assessees The Ld CIT(A) has enhanced the value u/s 56(2) of the Act purely on the conjecture basis. The assessees have filed the document to prove the identity creditworthiness and genuineness of the transaction of each shareholder and discharged their burden as requirement u/s 68 of the Act. The addition of income made u/s 68 of the Act as well as the enhancement of income u/s 56(2)(viib) of the Act are liable to be deleted and deleted accordingly. Assessee appeal allowed.
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