TMI Blog2019 (6) TMI 1120X X X X Extracts X X X X X X X X Extracts X X X X ..... heir consideration. We find that the AO did not accept the submissions of the assessee that no evidence brought on record to show the shipping and export expenses were reimbursed. However, it is seen in the assessment order itself that the AO mentioned that on perusal of the details field by the assessee and written submissions dated 28.01.2016, the AO mentioned only that the assessee failed to give bifurcation expenses relating to the impugned amount. CIT(A) in his impugned order clearly said that all the details as submitted by the assessee before him as well as in the assessment proceedings clearly shows that the payments were made to clearing shipping agencies and are in the nature of reimbursement. On such payments, we find which were paid on behalf of the assessee to different parties including the government authorities. - Decided against revenue. - ITA No.546/Kol/2017 - - - Dated:- 19-6-2019 - Sh. P.M. Jagtap, Vice President And Sh.S.S. Viswanethra Ravi, Judicial Member For the Appellant : Sh.C.J.Singh, JCIT, Sr.DR For the Respondent : Sh. Manish Tiwari, FCA ORDER PER S.S. VISWANETHRA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 56 was inserted vide Finance Act, 2013 w.e.f 01.04.2013 i.e. from AY 2014-15 to the effect that where a closely held company issues its shares at a price which is more than the FMV, then the amount received in excess of the FMV would be chargeable to tax in the hands of the recipient company as its income from other sources. I find from the facts of the case that the shares were indeed allotted in FY 2013-14 but the share application monies were received in the FY 2012-13 pertaining to AY 2013-14. According to my considered opinion, the connotation of the meaning 'received in any previous year used in section 56(viib) of the Act would be in respect of the year of receipt and not the year of allotment. In the instant case as rightly pointed out by the AR based on materials on record, share application monies were received during the year under consideration. Thus, I find that the provisions of section 56(2)(viib) are to be construed with respect to the year in which considerations were received and not the year in which the allotment of shares were made. In view of the foregoing discussions made on the pertinent matter, I do not find any merit on the part of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... F.Y. 2011-12 (AY 2012-13), another ₹ 36 lacs worth of consideration money was received by the assessee in FY 2012-13 i.e. the year under consideration. This means that the argument taken by the assessee that section 56(2)(vii b) is not applicable on the ground that the consideration was received in the preceding FY 2011-12 before the said section came into force is not correct. It was argued that the advance consideration was received in the form of share application money of ₹ 70 lacs in the preceding AY 2011-12 (AY 20112-13) and the balance consideration of ₹ 36 lacs was received in FY 2012-13 (AY 2013- 14) where the assessee finally allotted the shares, thus, completing the transaction in question. But the CIT(A) in para 4.2 of its order has made his decision based on share application money of ₹ 70 lacs being received in the preceding FY 2011-12 (AY 2012-13) which makes its finding incorrect and the order is perverse. The AO in para 3.4 of its order has correctly taken into account the entire transaction in respect of issue of 1,06,000 shares. 8. The assessee has tried to justify the issue price of ₹ 100 per share on the basis of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a company from a class or classes of persons as may be notified by the Central Government in this behalf. Explanation.-For the purposes of this clause,- (a) the fair market value of the shares shall be the value- (i) as may be determined in accordance with such method as may be prescribed ; or (ii) as may be substantiated by the company to the satisfaction of the Assessing Officer, based on the value, on the date of issue of shares, of its assets, including intangible assets being goodwill, know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature, whichever is higher. 12. The Ld. DR, Sh. C.J.Singh argued from the above said provision that it is clear that the assessee received ₹ 36 lacs in FY 2012-13 i.e. relevant to AY 2013-14, then the section 56(2)(viib) will be applicable to the aggregate consideration received for such shares which in this case amounts (₹ 70 + 36 lacs = 108 lacs) or 1.08 crores. To sum up, Sh. C.J.Singh submitted that the valuation as per DCF was arrived at ₹ 183.64 per share again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Co. Clearing Agency Pvt.Ltd. etc. on account of customs duty, CPT charges, octri charges, freight charges, insurance charges, survey charges, loading unloading charges, transport charges, stamp paper charges, custom entry charges, Doc delivery charges, Registration charges expenses etc. and contended the said expenses are in the nature of reimbursement and not liable to deduction in TDS as alleged by the AO. The AO did not accept the submissions of the assessee and added an amount of ₹ 36,97,339/- to the total income of the assessee. 16. Before CIT(A), the same submissions were made by the assessee. It is noted the CIT(A) while examining the list of details of clearing and forwarding charges indicating the name and addresses of such shipping and clearing agencies found satisfied that no TDS required to be deducted by giving reasons hereunder:- 5.2. I have considered the issue with reference to the assessment order as well as the written submission filed by the AR of the appellant. I find that the appellant has furnished complete details of expenses incurred under the head Shipping Clearing Charges before the AO. At the appellate st ..... X X X X Extracts X X X X X X X X Extracts X X X X
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