TaxTMI 
TaxTMI 
TaxTMI 
2019 (1) TMI 104
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....er for the sake of convenience. 2. The grounds raised by the assessee for Assessment Year 2014-15 in ITA No. 2852/Bang/2018 are as under. "1. On the facts and circumstances of the case and in law the learned CIT (A) erred in passing the order in the manner as done. 2. The CIT (A) erred in upholding the rejection of the report of valuation of the shares dated 15.11.2013 by tile AO merely on suspicion, surmise and conjecture and also the value of Rs. 400 "- equity share therein inclusive of premium amount of Rs. 390/- share. 3. The CIT (A) erred in upholding the arbitrary adoption of value of shares at Rs. 100/- share as on 31.03.2012 by the AO as against the value of Rs. 400/- share as on 31.03.2014 as per Appellant's valuation. ....
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....2.05.2014 by the AO merely on suspicion, surmise and conjecture and also the value of Rs. 1,538.55 equity share therein inclusive of premium of Rs. 1,528.55 share. 3. The CIT (A) erred in upholding the arbitrary adoption of value of share premium at Rs. 714.38 share by the AO as against the value of share premium of Rs. 1.528.55 share as per Appellant's valuation report dated 02.05.2014 which was based on Discounted Free Cash Flow method (DCF method). 4. The CIT (A) failed to appreciate that the consideration received for the shares equaled the fair market value of shares and no excess over the fair market value was received. 5. The CIT (A) failed to appreciate that the Act allowed the Appellant to adopt any method - either the pr....
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....as prescribed in Rule 11UA(2)(b) read with technical guide on share valuation issued by Research Committee of the Institute of Chartered Accountants of India. 3. The learned CIT(A) failed to appreciate that there was no discretion available to adopt NAV method by applying Rule 11UA(2)(a) rejecting the method of share valuation adopted by the Appellant as prescribed under Rule 11UA(2)(b) of the Income-tax Rules, 1962. 4. The learned CIT(A) failed to appreciate that the determination of fair market value by an accountant who has signed the report under Section 44AB of the Act is a technical breach of Rule 11 UA(2)(b) and hence a venial breach of Rule." Assessment Year 2015-16: "1. The learned CIT(A) erred in law, when he sustained the ....
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....r para 4.2 of the assessment order for Assessment Year 2014-15 and para no. 4.3 of the assessment order for Assessment Year 2015-16, it is noted by the AO that person who is said to have valued the share of the assessee company as on 15.11.2013 and 02.05.2014 respectively is none other than the person who has signed the Audit report u/s. 44AB of IT Act. He further pointed out that this is also noted by AO in same two paras of assessment order that Rule 11U(a) of Income Tax Rules, 1962, defines "accountant" as "for the purposes of sub-rule (2) of Rule 11UA means a fellow of the Institute of Chartered Accountants of India within the meaning of the Chartered Accountants Act, 1949 (38 of 1949) who is not appointed by the company as an auditor u....
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.... by him on a Tribunal order rendered in the case of M/s. Vaani Estates Pvt. Ltd. Vs. ITO as reported in (2018) 172 ITD 629 and also on another Tribunal order rendered in the case of Rameshwaram Strong Glass (P) Ltd. Vs. ITO as reported in (2018) 172 ITD 571. 6. I have considered the rival submissions. First of all, I reproduce the relevant Rule i.e. Rule 11U(a). The same is as under. "11U. For the purposes of this rule and rule 11UA,- "(a) "accountant" ,- (i) for the purposes of sub-rule (2) of rule 11UA, means a fellow of the Institute of Chartered Accountants of India within the meaning of the Chartered Accountants Act, 1949 (38 of 1949) who is not appointed by the company as an auditor under section 44AB of the Act or under sectio....
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....ered opinion, the second report dated 15.11.2013 is not acceptable because the same is not certified by a person who is accepted as Accountant as per Rule 11U(a) of IT Rules, 1962. The AO accepted the fair market value of Rs. 100/- per share as per certificate dated 02.12.2012 and accepted the receipt of Rs. 90/- per share and taxed only the excess receipt of Rs. 300/- per share out of total receipt of Rs. 400/- per share and hence, the order of AO is in line with the earlier valuation report given by a Chartered Accountant who can be accepted as accountant as per Rule 11U(a) because this valuer has not been appointed as auditor of the assessee company. Hence in Assessment Year 2014-15, I find no reason to interfere in the order of CIT(A). ....