TMI Blog2021 (5) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... -company. Satisfaction of the Assessing Officer as referred in explanation to Section 56(2)(viib) of the Act would be judicial satisfaction of the Assessing Officer. Judicial satisfaction means the Assessing Officer has to take into consideration the well established method of valuation of shares including the assets as explained in Explanation 2 to Section 56(2)(viib) of the Act. It cannot be arbitrary. The Assessing Officer has to take note of the judicial and established principles in arriving at his satisfaction. In this case, the Assessing Officer has not found any specific fault in rejecting or not satisfying with the valuation made by the assessee. When the Assessing Officer has not found any defect or error in the valuation of share ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roceedings, the AO calculated the value of each share as on 31.03.2012 at ₹ 24.44 each on the basis of balance sheet of the assessee company as on that date and the surplus amount received by the assessee on account of premium amounting to ₹ 8,24,000/- was added by him to the total income of the assessee u/s 56(2)(vii)(b) of the Act in the assessment completed u/s 143(3) vide an order dated 11.03.2016. On appeal, the Ld. CIT(A) confirmed the said addition made by the AO. Aggrieved by the order of the Ld. CIT(A), the assessee has preferred this appeal before the Tribunal. 3. I have heard the arguments of both the sides and also perused the relevant material available on record. It is observed that the similar issue relating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke into consideration the well established method of valuation of shares including the assets as explained in Explanation 2 to Section 56(2)(viib) of the Act. It cannot be arbitrary. The Assessing Officer has to take note of the judicial and established principles in arriving at his satisfaction. In this case, the Assessing Officer has not found any specific fault in rejecting or not satisfying with the valuation made by the assessee. When the Assessing Officer has not found any defect or error in the valuation of shares by the assessee company, it may not be necessary to apply the method of valuation prescribed under Rule 11UA of the I.T. Rules. Therefore, this Tribunal is unable to uphold the valuation made by the Assessing Officer under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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