TaxTMI 
TaxTMI 
2024 (5) TMI 1232
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....the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in rejecting contention of the assessee that the addition has been made by rejecting the valuation report of the shares submitted by the assessee. 4. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the above addition despite that amount has been wrongly calculated as per the method given under section 56(2)(viib) of the Act. 5. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the above addition by indulging in surmises without bringing on any adverse evidence against the assessee, only on the basis of presumption and assumption." 3. The assessee has also raised the following additional grounds of appeal: "7. On the facts and circumstances of the case and in view of CBDT notification 81/2023 dated 25.09.2023 introducing safe harbor of 10% by curative amendment in Rule 11UA of the Income tax Rules 1962, addition u/s 56(2)(viib) is unsustainable in law as the difference between fair value adopted by the AO and issue price is only 2.1% i.e. less than 10%." 4. ....
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.... may be several factors justifying the raising of a new plea in an appeal and each case has to be considered on its own facts. The Appellate Assistant Commissioner must be satisfied that the ground raised was bona fide and that the same could not have been raised earlier for good reasons. The Appellate Assistant Commissioner should exercise his discretion in permitting or not permitting the assessee to raise an additional ground in accordance with law and reason. The same observations would apply to appeals before the Tribunal also. 7. The view that the Tribunal is confined only to issues arising out of the appeal before the Commissioner of Income-tax (Appeals) takes too narrow a view of the powers of the Appellate Tribunal [vide, e.g., C.I.T, v. Anand Prasad (Delhi), C.I.T. v. KaramchandPremchand P. Ltd. and C.I.T. v. Cellulose Products of India Ltd. . Undoubtedly, the Tribunal will have the discretion to allow or not allow a new ground to be raised. But where the Tribunal is only required to consider a question of law arising from the facts which are on record in the assessment proceedings we fail to see why such a question should not be allowed to be raised when it is necessar....
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....ct as the difference between the two values is minuscule and this contention of assessee is supported by the order of the Co-ordinate Bench of ITAT Chennai in the case of DCIT, Non Corporate Circle-1(1), Chennai Vs. M/s Jain Housing, 2019(8) TMI 1827- ITAT Chennai, Dated-August 8, 2019, where the ITAT deleted the addition made by AO u/s 56(2)(viib) holding as under: "11. Grounds 3 & 4 challenges the direction of the ld. CIT(A) in deleting the addition made u/s. 56(2) (viia) of the Act. The ld. CIT(A) granted relief after considering the fact that the difference of fair market value and the value adopted by the Assessing Officer is less than 1%. Nothing was brought to our notice controverting the findings of the ld. CIT(A). In these circumstances, we uphold the order of the ld. CIT(A) in this issue. Accordingly, grounds of appeal 3 & 4 raised by the Revenue stand dismissed." 12. We find that the CBDT after having detailed consultation with various stakeholders, in order to mitigate the hardship faced from the un-intended consequences of Section 56(2)(viib) read with rule 11UA, via notification 81/2023 dated 25.08.2023 has introduced a safe harbor of 10% variation in value. Releva....
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....o make the " provision workable, a proviso which supplies an obvious omission in the section and is required to be read into the section to give the section a reasonable interpretation, requires to be treated as retrospective in operation, so that a reasonable interpretation can be given to the section as a whole. This view has been accepted by a number of High Courts. In the case of CIT vs. Chandulal Venichand [1994] 209 ITR 7, the Gujarat High Court has held that the first proviso to section 43B is retrospective and sales tax for the last quarter paid before the filing of the return for the assessment year is deductible. This decision deals with assessment year 1984-85. The Calcutta High Court in the case of CIT vs. Sri Jagannath Steel Corporation [1991] 191 ITR 676, has taken a similar view holding that the statutory liability for sales tax actually discharged after the expiry of the accounting year in compliance with the relevant statute is entitled to deduction under section 43B. The High Court has held the amendment to be clarificatory and, therefore, retrospective. The Gujarat High Court in the above case held the amendment to be curative and explanatory and hence retrospe....