TMI Blog2020 (10) TMI 1083X X X X Extracts X X X X X X X X Extracts X X X X ..... under the DCF method adopted by the Assessee in its report of valuation. The ld. counsel for the assessee, however, submitted that what was filed before the CIT(Appeals) was only financial statements to substantiate the valuation as made by the assessee. In our view, when the basis of conclusion of CIT(Appeals) is the financial statements filed by the assessee before him, it was incumbent upon the CIT(A) to have confronted the material filed before him to the AO in accordance with the mandate of Rule 46A of the I.T. Rules, 1962. Since there is a violation of Rule 46A of the Rules, the issue should be remanded back to the CIT(Appeals) for fresh consideration after affording opportunity to the AO. - Decided in favour of revenue for statis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing this appeal which has been explained as owing to delay in receiving approval from the Principal CIT. The delay in filing the appeal is condoned as the same has occurred due to reasonable and sufficient cause. 3. The assessee is a domestic company engaged in the business of internet services and infrastructure management services. During the relevant previous year, the assessee issued 19500 shares and received share premium of ₹ 6,98,05,000 from Manipal Education Medical Group (I) P. Ltd. Section 21 clause (B) of Finance Act, 2012 introduced Sec.56(2)(viib) of the Act with effect from the 1st day of April, 2013, and the said provisions reads thus:- Income from other sources. 56. (1) Income of every kind which is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tangible assets being goodwill, know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature, whichever is higher; (b) venture capital company , venture capital fund and venture capital undertaking shall have the meanings respectively assigned to them in clause (a), clause (b) and clause (c) of Explanation to clause (23FB) of section 10; 4. Section 56(2)(viib) of the Act was introduced by the Finance Act 2012 with effect from the 1st day of April, 2013, which requires a Company (issuer), not being a company in which the public are substantially interested, to issue shares at Fair Market Value (FMV). Any consideration received by such issuing Company in excess of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the DCF method was details and workings provided by the Assessee as per the whims and fancy of the management to arrive at higher value to issue shares at a huge premium. For these reasons, the AO rejected the valuation report prepared as per DCT method and proceeded to value shares as per the book value method and arrived at a value of ₹ 297 per share and treated the difference between the FMV and premium received as income chargeable to tax u/s. 56(2)(viib) of the Act. 6. On appeal by the assessee, the CIT(Appeals) deleted the addition made by the AO against which the revenue has preferred the present appeal before the Tribunal. 7. At the time of hearing, it was agreed by both the parties that there was a violation of Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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