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The Tribunal held that the workings provided by the Department for determining the fair market value (FMV) of shares at Rs. 131.86 per share were not in accordance with Rule 11UA of the Income Tax Rules, 1962. The Tribunal had intended to adopt Rule 11UA for FMV determination and had directed the Department to furnish workings accordingly. However, the Department's workings did not consider figures from certain intermediary companies. In the assessee's wife's case, the Tribunal observed that the AO's valuation of Rs. 131.86 per share suffered from fallacies and was not as per Rule 11UA. The AO subsequently computed FMV at Rs. 70.59 per share u/r 11UA in the wife's case. The assessee sought rectification to substitute the FMV of Rs. 131.86 per share with Rs. 70.59 per share, which the Tribunal allowed, considering it an arithmetical mistake rectifiable u/s 254(2). The Tribunal directed the AO to adopt FMV of Rs. 70.59 per share and recompute capital gains accordingly in the assessee's case.
The Tribunal held that the workings provided by the Department for determining the fair market value (FMV) of shares at Rs. 131.86 per share were not in accordance with Rule 11UA of the Income Tax Rules, 1962. The Tribunal had intended to adopt Rule 11UA for FMV determination and had directed the Department to furnish workings accordingly. However, the Department's workings did not consider figures from certain intermediary companies. In the assessee's wife's case, the Tribunal observed that the AO's valuation of Rs. 131.86 per share suffered from fallacies and was not as per Rule 11UA. The AO subsequently computed FMV at Rs. 70.59 per share u/r 11UA in the wife's case. The assessee sought rectification to substitute the FMV of Rs. 131.86 per share with Rs. 70.59 per share, which the Tribunal allowed, considering it an arithmetical mistake rectifiable u/s 254(2). The Tribunal directed the AO to adopt FMV of Rs. 70.59 per share and recompute capital gains accordingly in the assessee's case.
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TaxTMI 
TaxTMI 
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