AI Drafter 
TaxTMI 
TaxTMI 
2018 (3) TMI 882
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.... facts in not deleting the addition of Rs. 11,84,46,336/- fully as made by Ld. AO on account of alleged difference between value at which shares were purchased and value of shares as computed by Ld. AO purportedly under rule 11 UA and that too by recording incorrect facts and findings and without appreciating/considering the submissions and evidences filed during the course of appellate proceedings. 2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in rejecting the submission of assessee that AO has wrongly taken the book value of land at Rs. 16,78,65,600/- instead of Rs. 6,32,75,332/- as claimed and has erred in sustaining the addition partly. 3. That in any case an....
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....96 per shares. 3.2 However, the AO observed that the assessee while valuing the shares of TEPL has taken the book value of the land shown by the TEPL in its balance sheet. The AO was of the view that the fair market value of the land as per the circle rate pertaining to the assessment year 2014-15 should have been taken into consideration while determining the value of the shares of TEPL. Accordingly, the AO substituted the book value of the land with the fair market value of the land as per the circle rate and determined the value of shares at Rs. 45.72 per shares of TEPL. The AO in doing so, also referred the section 56(2)(viia) of the Act read with Rule 11UA of the Rules. Thus, as per the AO with difference of Rs. 40.72 per shares (Rs....
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....le Bombay High Court in the case of Sharukh Khan Vs. DCIT reported in 90 taxmann.com 284 wherein it was held as under : "6. Prima facie, the order disposing of the objections, while dealing with the objection of no reason to believe that income has escaped assessment on application of Section 56(2)(vii) of the Act, has completely ignored the Explanation thereto. The Explanation to Section 56(2) (vii) of the Act states that the fair market value is to be determined in accordance with the Income Tax Rules. The office note annexed to the Assessment Order dated 28th February, 2013 passed under Section 143(3) of the Act holds that on application of Rule 11 UA of the Income Tax Rules, the value per share came to less than Rs. 5/- per sha....
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....eads as under: "56. (1) Income of every kind which is not to be excluded from the total income under this Act shall be chargeable to income-tax under the head "Income from other sources", if it is not chargeable to income-tax under any of the heads specified in section 14, items A to E. (2) In particular, and without prejudice to the generality of the provisions of subsection (1), the following incomes, shall be chargeable to income-tax under the head "Income from other sources", namely :- (i)XXXXXXXXXXXXXX (viia) where a firm or a company not being a company in which the public are substantially interested, receives, in any previous year, from any person or persons, on or after the 1st day of June, 2010, any prop....
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....e assets in the balance-sheet as reduced by any amount of tax paid as deduction or collection at source or as advance tax payment as reduced by the amount of tax claimed as refund under the Income-tax Act and any amount shown in the balance-sheet as asset including the unamortised amount of deferred expenditure which does not represent the value of any asset; L = book value of liabilities shown in the balance-sheet, but not including the following amounts, namely:- (i) the paid-up capital in respect of equity shares; (ii) the amount set apart for payment of dividends on preference shares and equity shares where such dividends have not been declared before the date of transfer at a general body meeting of the compa....