TaxTMI 
TaxTMI 
2018 (6) TMI 1114
X X X X Extracts X X X X
X X X X Extracts X X X X
....pany, which filed its return of income for the year under consideration on 24.09.2013 declaring total income of Rs. 25,99,450/-. During the year under consideration, the assessee-company had received a sum of Rs. 80 lakhs on account of allotment of 25,600 equity shares of the face value of Rs. 100/- per share at a premium of Rs. 212.50 per share. During the course of assessment proceedings, the assessee was required by the Assessing Officer to file a certificate as per Rule 11UA(1)(b) of the Income Tax Rules, 1962. As per the said certificate filed by the assessee, fair market value of the shares of the assessee-company was Rs. 251.03 per share as against the price of Rs. 312.50 per share received by the assessee. The difference of Rs. 15,7....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of Rs. 15,73,632/- made by the Assessing Officer under section 56(2)(viib) for the following reasons given in paragraph no. 3.3, 3.4 and 3.5 of the impugned order:- "3.3. I have considered the submission of the appellant and perused the relevant assessment records. The appellant had sold shares valued at Rs. 312.50 per share as per its I.T. Return. During the assessment proceedings, the A.O had issued notice under section 141(1) of the Act for furnishing certificate per Rule 11 UA(1)(b) of the Income Tax Rules 1962. The Chartered Accountant of the appellant had submitted detailed valuation report and valued the shares at Rs. 251.03 per share. On the basis of this valuation submitted by the appellant, the A.O had added back the prem....
X X X X Extracts X X X X
X X X X Extracts X X X X
....(via) or clause (vic) of clause (vicb) or clause (vid) or clause (vii) of section 47". 3.5. The appellant has whimsically submitted second valuation report which contradicts the first valuation report submitted by him to the AO. This second valuation report constitutes additional evidence under Rule 46A of the Income Tax Rule 1962. This evidence has no relevance to the appeal and is not admitted. Even if the submission of the A/R of the appellant is accepted, than it would mean that the appellant had sold shares at below market price amounting to Rs. 223.20 per share (Rs.535.70 - Rs. 312.50). This amount of Rs. 223.20 per share, would be chargeable to tax in the hands of the purchaser, the total consideration amounting to Rs. 57,13....
X X X X Extracts X X X X
X X X X Extracts X X X X
....assets. He contended that no opportunity was given by the Assessing Officer to the assessee to exercise this option and it was required by the Assessing Officer to file the valuation certificate under Rule 11UA, which was based on book value of assets and liabilities as shown in the balance-sheet. He contended that the assessee, therefore, exercised this option during the course of appellate proceedings before the ld. CIT(Appeals) and substantiated its claim for higher fair market value of its shares by filing the valuation based on the fair market value of its fixed assets as on the date of issue of shares. He contended that the said valuation based on the report of Registered Valuer, however, was not considered by the ld. CIT(Appeals) and....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... no opportunity, however, was given by the Assessing Officer to the assessee to substantiate its claim for higher fair market value of its shares on the date of issue of shares based on the fair market value of its assets in terms of Explanation (a)(ii) to section 56(2)(viib). There is nothing in the assessment order passed by the Assessing Officer to show that any opportunity was given by him to the assessee to exercise its option given as per Explanation (a)(ii) to section 56(2)(viib). The assessee, therefore, exercised the said option and filed the valuation of its shares based on the fair market value of its assets duly supported the valuation report prepared by the Registered Valuer. The ld. CIT(Appeals), however, did not admit the sai....