Purposive interpretation of residential house exemption: unregistered purchase agreement alone does not defeat relief, but investment must be verified...
ITAT allowed the appeal, finding the lower authorities' approach legally incorrect. The Tribunal held that the assessee company's chosen Discounted Cash Flow (DCF) method for share valuation was valid under Rule 11UA(1)(c), and the Assessing Officer (AO) could not arbitrarily disregard this method. The Tribunal noted inconsistent treatment between resident and non-resident investors' share premium and rejected the addition under Section 56(2)(viib). Furthermore, the Tribunal ruled that the amendment to Section 115BBE should not be applied retroactively, as it was not intended to cover the assessee's case. The decision effectively deleted the additions made by the AO and confirmed by the CIT(A), providing relief to the assessee company.
ITAT allowed the appeal, finding the lower authorities' approach legally incorrect. The Tribunal held that the assessee company's chosen Discounted Cash Flow (DCF) method for share valuation was valid under Rule 11UA(1)(c), and the Assessing Officer (AO) could not arbitrarily disregard this method. The Tribunal noted inconsistent treatment between resident and non-resident investors' share premium and rejected the addition under Section 56(2)(viib). Furthermore, the Tribunal ruled that the amendment to Section 115BBE should not be applied retroactively, as it was not intended to cover the assessee's case. The decision effectively deleted the additions made by the AO and confirmed by the CIT(A), providing relief to the assessee company.
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