Political contribution deductions require assessee-specific proof before cash-back allegations can justify disallowance or unexplained-money additions...
The ITAT upheld the CIT(A)'s order deleting the addition under section 56(2)(x) relating to the valuation of unquoted IG3 and ETL Power shares purchased by the assessee. The Tribunal affirmed that the negative net worth must be considered in valuation under Rule 11UA, aligning with prescribed methodology and precedent. The assessee's valuation of IG3 shares at Rs. 11.989 per share and ETL Power shares at Rs. 13.41 per share was held to be consistent with Rule 11UA. The purchase prices paid by the assessee exceeded these FMVs or were within the permissible tolerance limit under Rule 11UA(4). The Tribunal rejected the Revenue's approach of inflating FMV by excluding negative net worth and confirmed the characterization of loans to related companies, declining to treat them as amounts set apart for dividend payments under Rule 11UA. Consequently, all Revenue grounds were dismissed, and the CIT(A)'s order was upheld without interference.
The ITAT upheld the CIT(A)'s order deleting the addition under section 56(2)(x) relating to the valuation of unquoted IG3 and ETL Power shares purchased by the assessee. The Tribunal affirmed that the negative net worth must be considered in valuation under Rule 11UA, aligning with prescribed methodology and precedent. The assessee's valuation of IG3 shares at Rs. 11.989 per share and ETL Power shares at Rs. 13.41 per share was held to be consistent with Rule 11UA. The purchase prices paid by the assessee exceeded these FMVs or were within the permissible tolerance limit under Rule 11UA(4). The Tribunal rejected the Revenue's approach of inflating FMV by excluding negative net worth and confirmed the characterization of loans to related companies, declining to treat them as amounts set apart for dividend payments under Rule 11UA. Consequently, all Revenue grounds were dismissed, and the CIT(A)'s order was upheld without interference.
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