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TMI Blog2023 (6) TMI 1282X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Act (hereinafter referred to as 'the Act') on 29/03/2016 for the Assessment Year 2013-14. 2. The assessee has raised sole ground of appeal: "1. In the facts and circumstances of the case the Ld. A.O. has erred in law in making addition of Rs. 48,45,000/- U/s 56(2)(viib) of the Income Tax Act, 1961 ignoring the fact that the Share Application money pending allotment was received in F.Y.2010-11, which ought to be deleted and CIT(A) also in error in confirming the same. 2. That the assessee has right to add, modify or delete any ground during the appeal proceeding." 3. The only issue to be decided in this appeal is as to whether the Ld. CIT(A) was justified in confirming the addition made u/s 56(2)(viib) of the Act in the sum of Rs. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iv) Furnish calculation of share premium. (v) Please explain as to why consideration received in excess of fair market value for issue of shares in view of provision u/s 56(2)(vii)(b) of I.T. Act. 1961 be not treated income from other sources. 5. In response to the said query, the assessee filed reply vide submission dated 15/02/2016 with the stating that the Fair Market Value ("FMV") of the share at the time of issue of share was Rs. 1136.92 per share and that the company had issued the shares at a price less than fair market value. In support of these, the assessee filed valuation report dated 28/02/2013 prepared by a Chartered Accountant, Sh. A.K. Agrawal, who had valued the shares using Discounted Cash Flow (DCF) valuation method ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... together with their PAN. The assessee has also furnished the bank accounts of the share holders, copy of income tax returns and copy of capital account of share holders duly explaining the sources for making investment in share capital and share premium with the assessee company. The assessee has furnished during the course of assessment proceedings, valuation report from independent Chartered Accountant, Mr. Deepak Agarwal vide valuation report dated 22/02/2013, who had valued the shares using DCF method at Rs. 992 per share to be the fair market value. Under the DCF method, obviously the valuation report if carried out by any person, had to value the shares by relying on certain assumptions and the projections about the performance of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of this Tribunal in the case of Cinestaan Entertainment (P.) Ltd. vs. ITO reported in 106 taxmann.com 300 (Delhi-Trib.) wherein it was held as per section 56(2)(viib) of the Act read with Rule 11U and 11UA of the Rules, the assessee has an option to do valuation of shares and determine fair market value either using DCF method or NAV method and Assessing Officer cannot examine or substitute his own value in place of value determined. Further, it was also held that the Revenue cannot sit in armchair of businessman to decide what is profitable and how business should be carried out and that commercial expediency has to be seen from point of view of businessman and not from the point of view of the revenue. It was further held that when shar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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