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TMI Blog2023 (7) TMI 1447X X X X Extracts X X X X X X X X Extracts X X X X ..... see is relating to the addition made by the Assessing Officer of Rs.1,16,65,600/- u/s 56(2) of the Act on account of excess share premium received by the assessee as compared to the fair market value of the shares. 3. The assessee during the year issued 920000 shares @10/- each and further of Rs.40/- each raising total share capital including share premium of Rs.46000000/- The Assessing Officer however determined the fair market price of the shares issued by the assessee at Rs.27.3/- per share and he further observed that the assessee had issued shares @ Rs.40/-. He added the differential amount of Rs.11665600/- u/s 56(2)(viib) of the Act. As per the provisions of section 56(2)(viib) of the Act, the fair market value of the shares can be d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount shown in the balance-sheet as asset including the unamortised amount of deferred expenditure which does not represent the value of any asset; L = book value of liabilities shown in the balance-sheet, but not including the following amounts, namely:- (i) the paid-up capital in respect of equity shares; (ii) the amount set apart for payment of dividends on preference shares and equity shares where such dividends have not been declared before the date of transfer at a general body meeting of the company; (iii) reserves and surplus, by whatever name called, even if the resulting figure is negative, other than those set apart towards depreciation; (iv) any amount representing provision for taxation, other than amount of tax paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowed by the assessee as per the report given by the accountant as per the prescribed rules. The Assessing Officer however has proceeded to calculate the market value of the shares as per clause (a) of Rule 11UA(2)(a), where as, the assessee has opted fair market value of the shares under Rule 11UA(2)(b) of the I.T. Rules. It has been specifically provided u/r 11UA(2) that the fair market value of the shares can be determined either in the manner as prescribed in clause (a) or clause (b) at the option of the assessee. Therefore, since it was the option of the assessee to follow either clause (a) or clause (b), the assessee has followed the method prescribed under clause (b) of Rule 11UA(2), therefore, the action of the Assessing Officer in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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