TaxTMI 
TaxTMI 
2023 (6) TMI 1274
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....ground nos. 1, 4, 5 & 6. 4. Ground No. 2 relates to addition of Rs. 9,00,000/- u/s 68 of the Income Tax Act, 1961. 5. Ground No. 3 relates to enhancement of income by Rs. 70,50,000/- u/s 56(2)(viib). 6. Heard the arguments of both the parties and perused the material available on record. 7. The AO made addition of the entire share application money of Rs. 94,00,000/- u/s 68 of the Income Tax Act, 1961 based on the bank statements and lack of creditworthiness of the applicant parties. The AO treated entire receipt as bogus transaction and unexplained credit. The ld. CIT(A) held that the assessee has received Rs. 85,00,000/- in the earlier years and held that no addition u/s 68 called for in the current year. At the same time, the....
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....the decision of ITAT Delhi in the case of Agro Portfolio Pvt. Ltd. vs. ITO 2018, 171/ITD/74 (Del). 10. We have gone through the facts on record and the judgment quoted by the revenue. The order in the case of Agro Portfolio Pvt. Ltd. vs. ITO (supra) is not applicable to the facts of this case. In the similar issue stands adjudicated by the order of the Tribunal in the case of ACIT Vs. M/s Gamma Pizzakraft (Overseas) Pvt. Ltd. in ITA No. 1309/Del/2020 vide order dated 12.05.2023. The relevant part is as under: "20. Whether the AO can change the method of valuation of unquoted shares under Rule 11UA of I.T. Rules 1962? 21. The provisions of Section 56 and Rule 11UA as under: "Income from other sources. 5....
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.... as may be 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), clause (b) and clause (c) of Explanation to clause (23FB) of section 10;" 22. From the above, it is evident that the FMV of the unquoted share be the value as determined by the prescribed meth....
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....transfer at a general body meeting of the company; (iii) reserves and surplus, by whatever name called, even if the resulting figure is negative, other than those set apart towards depreciation; (iv) any amount representing provision for taxation, other than amount of tax paid as deduction or collection at source or as advance tax payment as reduced by the amount of tax claimed as refund under the Income-tax Act, to the extent of the excess over the tax payable with reference to the book profits in accordance with the law applicable thereto; (v) any amount representing provisions made for meeting liabilities, other than ascertained liabilities; (vi) any amount representing contingent liabilities other tha....
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....uld not meet the AO as he was busy with some other matter and that the he (valuer) could not wait longer as he had other appointments. Further, the appellant has provided answers to the queries raised by the AO to the Valuer and also supplied the documents /projection estimates given to the Valuer. The AO has not accepted this. It is noted here that there is merit in the AO's observation that the valuation report is very brief. However, in the absence of any prescribed format or size, one cannot reject the valuation merely on that ground. Further, the AO has not pointed out any specific deficiency in the Valuation Report itself Hence, it would be incorrect to reject the DCF method solely on that ground. Issue no. 4: 27. Wh....
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....ion has been exercised by the assessee, AO has no right to reject the method. However, the rejection of method is not appropriate not because it is a prescribed method but because the AO has no role in selection or rejection of the method under Rule 11UA. Hence, the AO has erred in rejecting the DCF method especially when it is one of the duly prescribed methods under the IT Rules." 11. In the instant case also, the ld. CIT(A) has not brought out any defect in the methodology and summarily rejected the valuation made under the prescribed rules. Hence, we cannot support the decision of the ld. CIT(A) on this issue. The appeal of the assessee on this ground is allowed. 12. With regard to Rs. 9,00,000/- received on 04.09.2014 by the asse....