2019 (4) TMI 410

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....ovision of section 56(2)(viia) read with rule 11UA, whereby AO has valued the difference on transfer of shares at Rs. 1,35,11,59,300/-. 2. The assessee's stay application was listed for hearing on 22.2.2019. On that date, this bench observed as under:- "The appellant assessee seeks for stay of outstanding demand of Rs. 59,63,15,380/- out of total demand of Rs. 61,08,15,380/-. The only issue involved is the valuation of shares done by the AO u/s 56(2)(viia)read with rule 11UA, wherein AO has valued the shares of the assessee transferred by one group company to another and worked out the difference at Rs. 1,35,11,59,300/-. Ld. Counsel before us has given various propositions as to why the calculation itself is not correct. ....

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....luation done by the AO in terms of section 11UA is not correct as there various legal and factual error like, firstly, he has not included the valuation of shares of 4 companies in his calculation as per rule 11UA; and secondly, is incorrect calculation with respect to remaining 22 companies. In support of his contention, he has filed correct calculation as per 11UA of all the companies which are placed before us in paper book running from pages 1A to 1V. He submitted that all the figures have taken from the audited balance sheet and if such correct valuation of 11UA is worked out then the net aggregate value would be negative, that is Rs. (-)189 crores. Thus, prima facie the entire demand is not enforceable. He further submitted that as pe....

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.... had also tried to demonstrate that the fair market value of shares of all the companies as valued by the AO as per Rule 11UA is factually not correct. Looking to this prima facie contention of the Ld. Counsel only, this Bench was of the view that the working of calculation given by the AO as well as by the assessee can be verified so that matter can be heard in that light or the matter could be remanded back to the Assessing Officer for necessary verification and that is the reason why instead of granting stay of the demand, the appeal itself was fixed on out of turn basis and hearing was posted for hearing on 27.2.2019. However, the Ld. CIT DR has raised the objection that sufficient time has not been allowed for preparing the case and th....

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....appreciated correctly either by the AO or by the Ld. CIT (A). The working given by Ld. Counsel is reproduced hereunder:- Rajsheela Growth Fund Pvt. Ltd., New Delhi Detail of Investments A.Y 2015-16 Sl. No. Particulars Number of Shares purchased Purchase price per share Fair Market Value u/r 11UA Diff. in value Diff Amount (Rs.) 1 Ambience Buildcon Pvt. Ltd. 3,01,211 10.00 14.38 4.38 13,20,287 2 Aman Hospitality Pvt. Ltd. 4,82,66,526 10.00 -0.32 -10.32 (49,78,90,274) 3 Ambience IT Developers Pvt. 2,500 10.00 16.68 6.68 16,699 4 Greenline Developers Pvt. Ltd. 2,81,492 10.00 12.10 2.10 5,91,794 5 RSG Hous....

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.... 2.28 54,85,784 23 Tropical Infradevelopers Pvt. 17,068 696.57 712.50 15.93 2,71,812 24 Skyvalley Buildcon Pvt. Ltd. 6,25,000 10.00 12.68 2.68 16,76,532 25 Ambience Commercial Developers Pvt. Ltd. 2,36,20,099 21.16 5.09 -16.07 (37,94,59,820) 26 Indus Sor Urja Pvt. Ltd. 6,23,457 40.88 -1,705.97 -1,746.84 (1,08,90,82,677)   Total         (1,89,24,97,835) 7. Looking to the fact that there is a huge difference in the valuation done by the AO and working given by the assessee as per Rule11UA, which prima facie appears to be based on the method laid down in Rule 11 UA, we are of the opinion it is not a prima fac....