TaxTMI 
TaxTMI 
2023 (5) TMI 1412
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....d in the circumstances of the case, the ld. CIT(A) has erred in deleting the addition of Rs. 1,63,35,000/- made by AO on account of excessive share premium u/s 56(2)(viib) of the Income Tax Act, 1961. 2. Whether on the facts and in the circumstances of the case, the ld. CIT(A) has failed to appreciate that provisions of Section 57(2)(viib) of the Income Tax Act, 1961 are applicable in the year in which are allotted at a premium and not in the year in which the share application money was received." 3. The assessee company is engaged in the business of construction activities. The assessee filed return of income on 26.09.2015 declaring an income of Rs. Nil. During the year, the assessee company has allotted 16,5110 optionally con....
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....resort to his own method of valuation. 8. On the first issue, we have gone through the rulings of various benches. Section 56(2)(viib) has been inserted vide Finance Act, 2012 w.e.f. 01.04.2013 to provide that, where a closely held company receives in any previous year from any person being a resident, any consideration for issue of share that exceeds the face value of such shares, the aggregate consideration received for such shares as exceeds the fair market value of the shares, will be charged to tax in the hands of the recipient company as income from other sources. 9. After a subscriber entity advances amount for allotment of shares, the subscriber entity has every right to withdraw or cancel its request for allotment. Earlier, u....
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....inate Bench of Delhi ITAT in case of TS93-ITAT-2019 (Del) had held that share allotment date, not share application, is relevant date to trigger provisions of Section 56(2)(viib). 10. With regard to the Second issue, we find that the assessee has filed a valuation report dated 20.03.2015 under Rule 11UA from an authorized valuer who valued the shares at Rs. 1000/- per share as per Annexure B of the report. The valuer while determining the value of the optionally convertible preference shares as per the standards on related services (SRS) 4400. 11. The methodology used is as under: "Present Scenario OCPS = FV @10/- + premium @ 990/- = 1000/- Equity = 1 Equity Share = FV @ 10/- each. Conversion basis ....
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....hares is received- (i) by a venture capital undertaking from a venture capital company or a venture capital fund; or (ii) by a company from a class or classes of persons as may be notified by the Central Government in this behalf. Explanation.-For the purposes of this clause,- (a) the fair market value of the shares shall be the value- (i) as may be determined in accordance with such method 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....
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....amortized amount of deferred expenditure which does not represent the value of any asset; L = book value of liabilities shown in the balance-sheet, but not including the following amounts, namely:- (i) the paid-up capital in respect of equity shares; (ii) the amount set apart for payment of dividends on preference shares and equity shares where such dividends have not been declared before the date of 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 collect....