Transfer-pricing treatment of ITeS margins excludes pass-through tax recoveries and separate delayed-receivables interest after working-capital adjust...
Capacity-utilisation adjustments under TNMM can neutralise substantiated COVID-related idle costs where underutilisation materially affects profitabil...
TNMM functional comparability requires excluding rice manufacturers from a pure Basmati rice trader's benchmark and recognising operating export recei...
Working-capital adjustment subsumes delayed-receivable effects in TNMM benchmarking of captive software-development services, avoiding separate notion...
Transfer-pricing comparability requires exclusion of financially illogical super-profit comparables and correction of unsupported annual-report and ma...
Charitable character assessment preserves Section 80G approval despite inclusive spiritual teachings and incidental religious expenditure within the s...
Penalty proceedings for cash-loan acceptance require assessment proceedings and recorded Assessing Officer satisfaction; absent these, the proceedings...
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Section 56(2)(viib) deals with the consideration received by a company for issue of shares at a premium. The assessee company issued equity shares at a premium, which was questioned by the tax authorities. The key points are: The assessee is entitled to modify the net asset value (NAV) to determine the fair market value (FMV) of shares, as per the Explanation to Section 56(2)(viib). The assessee produced a valuation report and market valuation of its subsidiary to substantiate the FMV. Reworking the subsidiary's value using methods like discounted cash flow (DCF) is permissible if the valuation is correctly established. The tax authorities erred in not allowing modification of NAV components. The assessee's approach to determine FMV based on the subsidiary's valuation is in line with Section 56(2)(viib). The ITAT allowed the assessee's appeal on this issue.
Section 56(2)(viib) deals with the consideration received by a company for issue of shares at a premium. The assessee company issued equity shares at a premium, which was questioned by the tax authorities. The key points are: The assessee is entitled to modify the net asset value (NAV) to determine the fair market value (FMV) of shares, as per the Explanation to Section 56(2)(viib). The assessee produced a valuation report and market valuation of its subsidiary to substantiate the FMV. Reworking the subsidiary's value using methods like discounted cash flow (DCF) is permissible if the valuation is correctly established. The tax authorities erred in not allowing modification of NAV components. The assessee's approach to determine FMV based on the subsidiary's valuation is in line with Section 56(2)(viib). The ITAT allowed the assessee's appeal on this issue.
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