https://www.taxtmi.com/caselaws?id=754042 ITAT Delhi held that addition under section 56(2)(viib) for premium amount exceeding FMV on allotment of Optional Convertible Preference Shares to holding company was unsustainable. The tribunal found that deeming provisions of section 56(2)(viib) do not ordinarily apply when allotment is made to existing shareholders. Additionally, the FMV calculation using NAV method was justified when computed with reference to equity shares arising on conversion. Since convertible shares were allotted to wholly owned holding company, any benefit from alleged excess premium would effectively benefit the same shareholders with pre-existing rights. The tribunal declined to interfere with CIT(A)'s order and decided against revenue. en-us Wed, 12 Jun 2024 00:00:00 +0530 Sat, 15 Jun 2024 08:22:34 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=754042 ITAT Delhi held that addition under section 56(2)(viib) for premium amount exceeding FMV on allotment of Optional Convertible Preference Shares to holding company was unsustainable. The tribunal found that deeming provisions of section 56(2)(viib) do not ordinarily apply when allotment is made to existing shareholders. Additionally, the FMV calculation using NAV method was justified when computed with reference to equity shares arising on conversion. Since convertible shares were allotted to wholly owned holding company, any benefit from alleged excess premium would effectively benefit the same shareholders with pre-existing rights. The tribunal declined to interfere with CIT(A)'s order and decided against revenue. Case-Laws Income Tax Wed, 12 Jun 2024 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=754042