TMI Blog2020 (1) TMI 1022X X X X Extracts X X X X X X X X Extracts X X X X ..... h. Pradeep Singh Gautam, Sr. DR. ORDER This appeal filed by the assessee is directed against the order passed by the Ld. CIT(A)-33, New Delhi on 15.10.2018 in relation to the assessment year 2014-15. 2. The facts in brief are that assessee filed its e-return on 17.11.2014 declaring loss of ₹ 16,285/-. The return of the assesee was processed u/s. 143(1) of the Income Tax Act, 1961 (in short Act ) on 25.5.2015 and thereafter the case of the assessee was selected for scrutiny through CASS. Statutory notice u/s. 143(2) of the Act was issued on 28.8.2015 and duly served upon the assessee. In response to the same, the AR of the assessee attended the proceedings and filed the detailed as called for. The assessee company was incorporated on 29.1.2010. The assessee company is stated to be engaged in the business of setting up advance machines for diagnosis and treatment of cancer in association with hospitals all over India. The details filed by the AR of the assessee were examined on test check basis with reference to the books of accounts produced. Thereafter, the AO observed that the difference between the share premium rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate of ₹ 380.53 per share of Clearview Healthcare Pvt. Ltd (₹ 615 per share of Clearmedi Healthcare Private Limited) for which in continuation to same we are relying on , share purchase agreement dated 20/03/2014 and copy of income tax return of seller of shares of Clearview Health care Pvt Ltd (Shahsi Baliyan)) etc which is on records for adjudication as necessary plea was duly raised to AO. It was further submitted that Ld CIT(A) erred in confirming/sustaining the addition made of ₹ 9,19,632 u/s 56(2)(viib) of the Act in para 8.1 to 8.4 of his order by not appreciating that Once share sale/purchase done subsequently is considered at which shares of company are actually transacted then it would not be difficult to accept that share premium received in subject period is fully and completely justified and cannot be interdicted as done by AO. It was further submitted that Ld CIT(A) erred in not appreciating that when addition of ₹ 919,632 /- u/s 56(2)(viib) of the Act was palpably incorrect because after rejecting assessee s valuation no valid substitute for correct valuation has been brought on records as rejecting assessee s valuation does not mean that to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 32 in aggregate) within the meaning of provisions of section 56(2)(viib) of the Act (explanation to section 56(2)(viib) clause (ii) thereof where judicious satisfaction of AO is talked about). This plea of assessee has considerable cogency. The second plea is that when ultimately shares are bought by foreign buyer on basis of detailed due diligence which is reflected from share purchase resolution and share purchase agreement already placed on records and money paid for share purchase by foreign buyer is beyond shadow of doubt it cannot be said that subsequent money which is paid by foreign buyer to share holders sellers in India who have subscribed share at premium in subject period is not a clean money which defense of assessee also has considerable cogency. Further, plea of assessee that once assessee has given approved valuer (CA) report justifying share premium raised which is based on valid and prescribed method being DCF and said report is in accordance with ICAI norms and no where AO has countered said report by substitute valuation from alternate expert on basis of chosen DCF method and assessee s valuation is justified by subsequent sale/purchase and there is no unaccount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature. This amendment will take effect from 1st April, 2013 and will, accordingly, apply in relation to the assessment year 2013- 14 and subsequent assessment years 5.1 I further find that the issue in dispute is squarely covered by the decision of the ITAT A Chennai Bench decided in ITA Nos.663, 664 665/Chny/2019 in case of M/s Lalithaa Jewellery Mart Pvt. Ltd decided on 14.06.2019 wherein, it was held that: 15. Now coming to valuation of shares, as rightly submitted by the Ld. counsel for the assessee, there are two limbs in Section56(2)(viib) of the Act. As per explanation to Section 56(2)(viib) of the Act, the first limb is valuation to be made as per the prescribed method. In fact, the method for valuation of shares is prescribed under Rule 11UA of the Income-tax Rules, 1962. The second limb is the valuation of the company based on value on the date of issue including its assets. Assets include intangible assets such as goodwill, knowhow, patents, copyrights, trademarks, licences, franchises, etc. The Assessing Officer has not take ..... X X X X Extracts X X X X X X X X Extracts X X X X
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