TaxTMI 
TaxTMI 
2022 (7) TMI 375
X X X X Extracts X X X X
X X X X Extracts X X X X
....facts are narrated from the appeal in ITA No.6739/Mum/2019 for the sake of convenience, hence, the said appeal is taken as the lead case. ITA NO.6739/MUM/2019- A.Y. 2014-15: 3. This appeal by the assessee is directed against the order of Commissioner of Income Tax(Appeals)-4, Mumbai [ in short ' the CIT(A)'] dated 09/09/2019 for the Assessment Year 2014-15. 4. The assessee in appeal has raised solitary ground, the same is reproduced hereunder: "1. The Hon. CIT(A) erred in confirming the addition of Rs.48,75,0007- made u/s 56(2)(viib) of the I. T. Act 1961, on account of difference between the fair market value and actual consideration received by the appellant on issue of shares, not appreciating that the marginal differen....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... was a difference of Rs.39/- per share. The rounding off of fair market value to the nearest multiple of 100 was done with a bona-fide intention and not to take any unfair benefit. There is a marginal difference of 1.10% in the value of shares allotted and their fair market value in accordance with Rule 11UA. The ld.Authorized Representative of the assessee placing reliance on the decision of Tribunal in the case of DCIT vs. Jain Housing, 109 taxamann.com 428(Chennai) submitted that marginal difference of 1% should be ignored and the addition made may be deleted. 5.1 The ld.Authorized Representative of the assessee further to justify rounding off of fair market value of shares submitted that fair market value determined u/r.11UA(c) is ak....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... interpretation or explanation can be added if on plain reading of the provisions of section, the intent of the legislature is clear. The ld.Departmental Representative further submitted that wherever rounding off is required, the section itself makes provision for that. To support his contention the ld.Departmental Representative placed reliance on the decision of Hon'ble Supreme Court of India in the case of H.H.Laxmibai vs. Commissioner of Wealth Tax, 206 ITR 688. The ld.Departmental Representative further submitted that identical issue was considered by Kolkata Bench of the Tribunal in the case of Shresth Dealers Pvt. Ltd. vs. ITO in ITA No.2517/Kol/2018 for assessment year 2013- 14 decided on 07/06/2019, wherein under similar facts....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ein below: "56(2) In particular and without prejudice to the generality of the provisions of sub-section(1), the following incomes, shall be chargeable to income-tax under the head "Income from Other Sources", Xxxxxxxxxxxx Xxxxxxxxxxxx xxxxxxxxxxxx (viib): where a company, not being a company 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" On a plain reading of the section it emanates that addition u/s. 56(2)(viib) is made where the consideration ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to the amendment. Therefore, the ratio of the aforesaid decision does not support the case of the assessee. 11. On the contrary the decision of Kolkata Bench in the case of Shresth Dealers Pvt. Ltd. Vs. ITO (supra) deals with exactly the same issue as in the instant appeal. The Co-ordinate Bench after considering the facts and the provisions of section 56(2)(viib) of the Act held as under: "4. I have heard the arguments of both the sides and also perused the relevant material available on record. The learned counsel for the assessee has submitted that the fair market value of the unquoted equity shares sold by the assessee was Rs. 98.61 per share and the same was rounded off by the assessee to Rs. 100/-. He has contended that ev....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... literal interpretation would apply. Departure from literal rule while interpreting section is an exception, that too where literal rule would result in absurd construction of provision. In the instant case the provisions of section 56(2)(viib) of the Act or Rule 11UA no where provides for rounding off to nearest rupee or multiple of ten or hundred. The provisions are plain, clear and unambiguous. Thus, in the light of above observation, the impugned order is upheld and the appeal by assessee is dismissed. ITA NO.6740/MUM/2019 - A.Y. 2014-15. 13. This appeal by the assessee is directed against the order of Commissioner of Income Tax(Appeals)-4, Mumbai [ in short ' the CIT(A)'] dated 09/09/2019 for the Assessment Year 2014-15. 14. B....