2023 (11) TMI 851

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....- u/s 56(2)(viib) of the Act. 3. Brief facts of the case are that the assessee issued 1,50,755 shares of the face value of Rs. 10/- each. The assessee received the share premium of Rs. 3,61,86,0001- on the issue of above shares. The premium per share worked out to Rs. 240/-. The Assessing Officer noted that the assessee issued shares on two dates i,e. 18.04.2012 & 21.12.2012 during the year under consideration. Rule 11UA as. it was applicable on 18.04.2012, provided for only one method of valuation ie. book value method. The assessee submitted the valuation report dated 18.04.2012 issued by M/s Anand Dua & Associates, Chartered Accountants, thereby the value of per share was determined at Rs. 250.19 per share. The CA computed the value p....

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....e Act became applicable on the amounts which were received after 01.04.2012. The allotment of shares on 18.04.2012 was related to the amounts received in FY 2011-12. Hence, the assessee argued that provisions of section 56(2)(viib) of the IT Act are not applicable on the issue of shares on 18.04.2012. The assessee also submitted that the validity of the valuation report was for whole of the Financial Year 2012-13 as stated in the valuation report. The Assessing Officer cannot step into the valuation based on future projections. The other argument of the assessee was that section 56(2)(viib) of the IT Act is not applicable to non-resident. It was submitted that the allotment was made to non-resident i.e. Medipass Group and the resident Clear....

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....that the money claimed by the assessee was lying as share application money as on 31.03.2012. The shares were issued on 18.04.2012. The incident of taxing the excess amount cannot arise before the act of allotment of shares. Therefore, the applicability of section 56(2)(viib) of the IT Act has to be examined with reference to the allotment of the shares and not the receipt of the money in some other form. The Assessing Officer analyzed the interest cost in the projected year and observed that after taking into account the same the value of the shares could reduce to Rs. 39.63 per share in place of Rs. 250/- per share valued by the auditor. The Assessing Officer also examined the projected cash inflow and computed the value per share in nega....

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....concern of the assessee, this Tribunal has deleted the addition on a finding that those very shares are sold in next financial year at much higher amount. The submissions of the ld. Counsel for the assessee are as under:- "As noted by this hon'ble ITAT in case of associate company M/s Clearview Healthcare Pvt Itd vs ITO Ward 6(2) Delhi IT 2222/DEL/2019 AY 2014-2015 where same/identical addition W/s 56(2)(viib) excessive Share premium was made same is deleted by hon'ble ITAT on principal aspect that : on 01/12/2014 (FY 2014-2015 AY 2015-2016) share of clearview healthcare pt ltd (who is investor in present company and is subject matter of addition u/s 56(2) (viib)) were sold to foreign investor Medipass SRL Italy @ 380.53 pe....