TaxTMI 
TaxTMI 
2019 (2) TMI 1470
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....firming addition of Rs. 6.32 crores made u/s. 56 (2) (viib) of the Act. 3. The facts of the case are that the return of income for the year under consideration was selected for limited scrutiny through cass. Reasons for scrutiny selection is as under :- 1. Large share premium received during the year. 2. Low income in comparison to high loans/ advances/ investment in shares. 4. During the course of the scrutiny assessment proceedings the Assessing Officer asked the assessee to justify the increase in share application money from M/s. V. L. Estate Private Limited the details of which are as under :- AY No. of Shares Face Value Premium Per share Total amount of share application money increased 2012-13 50375 ....
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....es. b) You have claimed that M/s VL Estate (P) limited was investing intsalments, in this regard it is not out of place to mention here that the amount was given as share application money which is returnable without allotting the shares and cannot be treated as investments. It is clarified that once a company is making investment as share application money, the same can be returned back without allotting shares and it cannot be a reason for determining the premium for allotment of shares in subsequent years, as no shares were allotted in earlier years, Examination of basis of share premium can be verified only in the year when shares were allotted, i.e AY 2015-16. c) As shares were allotted at premium only in FY 2014-15 r....
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....ssessee company has failed to justify the allotment of share at premium during FY 2014-15, as there is no effort to justify the premium with the working of assessee company in the succeeding years. Assessee company has merely advanced the money as short term loans and advances as "loans to others" and "advance to others". e) Further, assesse company has claimed to file form-23 with ROC in regard which supports that the transaction is agreed at Rs. 800 per share, no supporting evidences showing the year in which the Form-23 has been filed in ROC hence no comments warranted on this issue. in view of the above discussion it is clear that after rule 11 UA came into existence there can not be any other method for determining th....
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....for the asseessee stated that Rs. 4.03 crores were accepted as share application money for 50375 share in A. Y. 2012-13 of Rs. 40 lacs was accepted as share application money for 5000 shares in A. Y. 2013-14. 8. The counsel stated that the share application money received in earlier assessment year cannot be considered during the year under consideration. The counsel further stated that only Rs. 1.79 crores were received as share application money for 24625 shares in the year under consideration. The counsel further stated that provisions of section 56 (2) (viib) of the Act are not applicable in as much as the assessee has furnished valuation report which was not accepted by the Assessing Officer. 9. The DR strongly supported the find....
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....the purpose of this clause- (a) the fair market value of the shares shall be the value- (i) as may be determined in accordance with such method as maybe prescribed ; or (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; (b) "venture capital company", "venture capital fund" and "venture capital undertaking" shall have the meanings respectively assigned to them in clause (a), (b) and clause (c) of [Explanati....