https://www.taxtmi.com/caselaws?id=776113 The ITAT Chennai upheld the CIT(A)'s order deleting additions under section 56(2)(x) regarding the valuation of unquoted IG3 and ETL Power shares purchased by the assessee. The Tribunal agreed that the negative net worth must be adopted as per Section 50B and Rule 11UA, rejecting the AO's inflated valuation. It was held that the FMV of IG3 shares at Rs. 11.989 per share and ETL Power shares at Rs. 13.41 per share, as computed by the assessee, were justified and within the tolerance limits prescribed under Rule 11UA. The Tribunal also ruled that loans advanced to related companies cannot be treated as amounts set apart for dividend payments under Rule 11UA. Consequently, the purchase prices paid by the assessee exceeded the FMV, negating any income addition. The Revenue's appeal was dismissed, and the CIT(A)'s order was affirmed without interference. en-us Tue, 29 Jul 2025 00:00:00 +0530 Tue, 05 Aug 2025 07:54:29 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=776113 The ITAT Chennai upheld the CIT(A)'s order deleting additions under section 56(2)(x) regarding the valuation of unquoted IG3 and ETL Power shares purchased by the assessee. The Tribunal agreed that the negative net worth must be adopted as per Section 50B and Rule 11UA, rejecting the AO's inflated valuation. It was held that the FMV of IG3 shares at Rs. 11.989 per share and ETL Power shares at Rs. 13.41 per share, as computed by the assessee, were justified and within the tolerance limits prescribed under Rule 11UA. The Tribunal also ruled that loans advanced to related companies cannot be treated as amounts set apart for dividend payments under Rule 11UA. Consequently, the purchase prices paid by the assessee exceeded the FMV, negating any income addition. The Revenue's appeal was dismissed, and the CIT(A)'s order was affirmed without interference. Case-Laws Income Tax Tue, 29 Jul 2025 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=776113