TaxTMI 
TaxTMI 
2019 (2) TMI 1470
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.... 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 10 790 4,03,00,000 2013-14 5000 10 790 40,00,000 2014-15 -....
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....ion 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 relevant to assessment year 2015-16, you have failed to furnish calculation for determining the premium as per Rule 11UA and any other documents....
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....ng 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 thevaluation of shares, than methods prescribed in rule 11 UA. Hence, the motive of assessee in adopting the method which is no where relevant in the present context ....
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....he 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 findings of the Assessing Officer. It is the say of the DR that since in the assessment year 2012-2013 and 2013-14 only share application money was received and no shares were allotted, the examination of the case from the....
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.... 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 [Explanation] to clause (23 FB) of section 10;] 10. It is true that the provision refers to consideration for issue of shares received in any previous year and it is equally true that Rs. 4.03 crores was received in A. Y. 2012-13 and Rs. 40 lacs was received in A. Y. 2013-14 but the fact of the mat....