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2022 (12) TMI 180 - AT - Income TaxAddition u/s. 56(2)(viib) - premium on issue of shares of the company - receiving consideration against share issued in excess of fair market value - As per assessee valuation report has been obtained from registered valuer on 14.03.2018 which justifies the share premium charged by the assessee on the issue of equity share capital and preference share capital - Revenue has pointed out the fact that the assessee company was incorporated on 07.11.2012 and the cut off date for the valuation of share was 16.11.2012 - HELD THAT:- Since the input needed for preparing the valuation report dated 14.03.2018 were not supplied correctly to the expert (CA), the results arrived at in the said valuation report dated 14.03.2018 cannot be accepted. Under these given facts and circumstances of the case we are of the considered view that since the company was incorporated on 07.11.2012 and cut off date of valuation of share was 16.11.2012 and the said acquisition of wholly owned subsidiary and step down subsidiary companies was after the cut off date of valuation of share, therefore as on 16.11.2012, the fair market value of the equity share capital remains at Rs. 10/- and that of the preference share capital remains at Rs. 100/-. Therefore, share premium of Rs. 2.50 per share on issue of equity share capital totalling to Rs. 5 lakh and share premium of Rs. 8 Cr received on issue of preference share capital at Rs. 25 per share along with face value of each equity share at Rs. 10/- and each preference share at Rs.100/- is in excess of the fair market value of Rs. 10/- per equity share and Rs. 100/- per preference share for preference and therefore, provisions of Section 56(2)(viib) of the Act have rightly been invoked by ld. AO for making the addition of Rs. 8.05 Cr received towards share premium in the hands of the assessee. Thus, the finding of ld. CIT(A) is reversed, addition at Rs.8.05 Cr. made by ld. AO is confirmed and ground of the Revenue’s appeal are allowed.
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