https://www.taxtmi.com/caselaws?id=449884 The ITAT Raipur examined whether preference shares issued at Rs.110/- per share constituted excess premium under Section 56(2)(viib). The AO rejected the assessee's Net Asset Value method and applied dividend discounting method, determining FMV at Rs.5/- per share. The ITAT found multiple errors in the AO's approach: incorrect assumption of redemption value, failure to consider convertibility feature, wrong dividend rate assumption (10% instead of 100%), inappropriate discount rate, and lack of basis for adverse inferences. The matter was remanded to AO for fresh FMV determination considering the tribunal's observations regarding the optionally convertible redeemable preference shares. en-us Mon, 19 Feb 2024 00:00:00 +0530 Thu, 22 Feb 2024 08:20:29 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=449884 The ITAT Raipur examined whether preference shares issued at Rs.110/- per share constituted excess premium under Section 56(2)(viib). The AO rejected the assessee's Net Asset Value method and applied dividend discounting method, determining FMV at Rs.5/- per share. The ITAT found multiple errors in the AO's approach: incorrect assumption of redemption value, failure to consider convertibility feature, wrong dividend rate assumption (10% instead of 100%), inappropriate discount rate, and lack of basis for adverse inferences. The matter was remanded to AO for fresh FMV determination considering the tribunal's observations regarding the optionally convertible redeemable preference shares. Case-Laws Income Tax Mon, 19 Feb 2024 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=449884