2022 (7) TMI 895

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....ssee carried the matter in appeal before the Ld. CIT(A) who vide order dated 06.12.2019 vide Appeal No.10274/18-19 granted substantial relief to the assessee. 3. Aggrieved by the order of the Ld. CIT(A), the Revenue is now in appeal before the Tribunal and has raised the following effective ground : 1. "Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs.10,74,52,800/- on account of share premium received in excess of fair market value under section 56(2)(vii)(b) of the I.T. Act, 1961. 4. During the course of assessment proceedings, the A.O. on perusal of the Balance Sheet of the assessee company noted that during the year assessee had issued 4720 equity shares at Rs.22,775/- each. He noted that these share were issued out of the pending share application money as on 31.03.2014. Thus, according to A.O. assessee had introduced fresh capital of Rs.47,200/- [4720 shares x Rs.10 each] and share premium of Rs.10,74,50,800/- [4720 shares x Rs.22,765.42 each]. The A.O. was of the view that since the assessee had introduced share capital during the year under consideration, provisions of Section 56(2)(viib) is applicable to....

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....1 was to obtain the permission or no objection of the Minstry of Information and Broadcasting for irrevocable transfer and assignment of broadcasting license in respect of the Shraddha Channel to the appellant. Thus, effectively, the Shraddha Channel would belong to appellant company in which SKF would have 32% shareholding. 5.2. It was further decided by way of an addendum dated 01/12/2010 to the said tri-partite agreement that if the license could not be obtained till 31/03/2013 i.e. after two years then the appellant would refund certain amount of share application money to SKF. It was further agreed that shares would be allotted in the FY 2015-16 whether the license is obtained or not. Since the appellant could not obtain the license of broadcasting till 31/03/13, SKF was refunded share application money of Rs.4,25,00,000/- as per the agreement and thereafter, shares of Rs.10,75,00,000/- were allotted in FY 2015-16 i.e. AY 2016-17. Since only 10,000 equity shares of the appellant were issued and paid up till FY 2015-16 and SKF was to be given 32% share in the appellant company, the appellant company decided to issue such number of equity shares to SKF which will make it share....

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.... can only be disregarded by obtaining report from another expert as the AO is not an expert in this field. The appellant placed reliance on various authorities in this regard. The appellant further submitted that the discounted cash flow method is based on projected/estimated figures which may not be comparable with the actual figures. The appellant also explained that since the license of broadcasting could not be obtained by the time of allotment of shares, the projected figures did not match with the actual figures. Therefore the appellant argued that the addition made u/s 56(2)(viib) should be deleted. 5.7. I have perused the assessment order, submissions of the appellant and evidences placed on record. On perusal of the same, it was observed that undisputedly the amount of Rs. 15 crores was received from SKF towards share application money by the appellant in the FY 2010-11 and shares were allotted in the FY 2015-16. The assessing officer made the addition u/s 56(2)(viib) by holding that the shares have been issued at a value in excess of its fair market value as per net asset value method. 5.8. The appellant explained in detail about the tri-partite agreement dated 03/1/2....

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.... appellant that the value computed as per DCF method cannot be interfered with by the AO as such reports are prepared by the experts and the AO has not been recognized as expert under the law. Further, the AO has no authority to disregard such valuation report as no procedure for reference to valuation officer etc. has been prescribed under the Act. Thus, the report of the concerned valuer / any expert has to be followed without any further ifs and buts and cannot be disloged / disregarded without bringing adequate evidence on record. Even the Courts have accepted this view in the following cases: a) Cinestaan Entertainment (P.) Ltd. v. ITO [2019] 106 taxmann.com 300 (Delhi - Trib.) b) ACIT v. Safe Decore (P.) Ltd. [2018] 90 taxmann.com 161 (Jaipur - Trib.) c) Rameshwaram Strong Glass (2019) 96 Taxmann.com 542 (Jaipur - Trib.) d) India Today Online Pvt. Ltd vs. ITO (ITAT Delhi) March 15, 2019 (Date of pronouncement) ITA Nos. 6453 & 6454/Del/2018. e) Apollo Tyres Ltd. 255 ITR 273 (SC) f) CIT vs. VibhuTalwar [2011] 242 CTR 262 (Delhi) g) CIT v. Glaxo Smithkline Asia (P.) Ltd. [2010] 195 Taxman 35, h) Ashwin Vanaspati Industries 255 ITR 26 (Gujarat) 5.13. Further, it....