2018 (8) TMI 649

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....of the Act. The finding of the Tribunal is based on Explanation (a)(i) to Section 56(2)(viib) of the Act and therefore, the issue of valuation as per Explanation (a)(ii) has not been adjudicated by the Tribunal. The ld AR has referred to the contention of the assessee in para 3.1 of the impugned order and submitted that the assessee raised this contention that it has valued the fair market value of shares based on Clause (ii) of Explanation (a) and not (i) of Explanation (a) to Section 56(2)(viib) of the Act. Hence, there is a mistake correcting the impugned order for not considering and adjudicating the issue of valuation in terms of Clause (ii) of Explanation (a) to Section 56(2)(viib) of the Act. The ld AR has thus pleaded that the impugned order may be recalled to the extent of adjudication of the contention and issue of valuation of shares in terms of Clause (ii) of Explanation (a) of Section 56(2)(viib) of the Act. 3. On the other hand, the ld DR has submitted that the Tribunal has given the findings on merits after considering the facts of the case and therefore, the said findings given on the merits, cannot be reviewed or revised in the proceeding U/s 254(2) of the Act. He....

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....on report by the Id. CIT (A) is not justified. He has further contended that the assessee had made a specific request for referring the land valuation to the DVO. However, the AO rejected the request for reference to the DVO on the reason that no such reference is possible under section 56(2)(viib) and that the reference under section 55A is related with capital gain income. The ld. A/R of the assessee has referred to the provisions of section 55A and contended that the section provides ascertaining the fair market value of a capital asset for the purpose of this chapter. Therefore, section 56 as well as section 55A fall in the same Chapter IV of the Act and hence the provisions of section 55A are applicable for ascertaining the valuation of the land for the purpose of section 56(2)(viib) of the Act. He has further contended that even otherwise as per section 142A of the Act, the AO is empowered to refer the valuation of any asset to Valuation Officer for the purpose of assessment or re-assessment. Thus the Id. A/R has submitted that the rejection of the request by the AO is contrary to the provisions of law. The Id. CIT (A) has taken up the role of Valuation Officer while deciding....

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....ny in which the public are substantially interested, receives, in any previous year, from any person being a resident, any consideration for issue of shares that exceeds the face value of such shares, the aggregate consideration received for such shares as exceeds the fair market value of the shares: Provided that this Clause shall not apply where the consideration for issue of shares is received- (i) by a venture capital undertaking from a venture capital company or a venture capital fund; or (ii) by a company from a class or classes of persons as may be notified67 by the Central Government in this behalf. Explanation.-For the purposes of this Clause,- (a) the fair market value of the shares shall be the value- (i) Xxxxxx xxxxxx (ii) as may be substantiated by the company to the satisfaction of the Assessing Officer, based on the value, on the date of issue of shares, of its assets, including intangible assets being goodwill, know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature, whichever is higher; Thus as per Clause (a) of the Explanation, the fair market value of shares shall be t....

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....tised 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 company; (iii) reserves and surplus, by whatever name called, even if the resulting figure is negative, other than those set apart towards depreciation; (iv) any amount representing provision for taxation, other than 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, to the extent of the excess over the tax payable with reference to the book profits in accordance with the law applicable thereto; (v) any amount representing provisions made for meeting liabilities, other than ascertained liabilities; (vi) any amount representing contingent liabilities other than arrears of dividends payable in respect of cumulative preferenc....