AI Drafter 
TaxTMI 
TaxTMI 
2025 (4) TMI 644
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.... eye of law and on facts. 2. On the facts and circumstances of the case, Ld. CIT(A) has erred both on facts and in law in confirming the addition of Rs. 1,48,267 treating it as income from other sources as per provisions of section 56(2)(viib) of the IT Act, 1961. 3. 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, the Ld. CIT(A) has erred in confirming the addition as the difference between fair value adopted by the AO and issue price is only 0.88% i.e. less than 10%. 4. On the facts and circumstances of the case, the learned CIT(A) has erred in both on facts and in l....
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....on 56(2)(viib) of the Act. 3. Upon assessee's appeal Ld. CIT(A) noted the following submissions of the assessee: "During the course of appellate proceedings, it was contested by the appellant that the share premium has been computed in accordance with valuation under Rule 11 UA. It was also contested that the variation from the valuation report is within the range of 10%. In this regard, reliance was also placed on the CBDT notification 81/2023 dated 25.9.2023." 3.1 However, Ld. CIT(A) was not convinced with the aforesaid submissions of the assessee, hence, he confirmed the AO's order by observing as under:- "I have perused the facts of the case and the submissions on record. It is seen that there was a clear differe....
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....e valuation price, the issue price shall be deemed to be the fair market value of such shares; (ii) sub-clause (a) or sub-clause (b) or sub-clause (d) of clause (A), for consideration received from a non-resident, by an amount not exceeding ten per cent of the valuation price, the issue price shall be deemed to be the fair market value of such shares. Therefore, as per the notification, the difference is (0.88%) which is less than 10% in the present case. Now, with regard to applicability of this notification, the assessee company is placing the reliance on judgment of Sakshi fincap Pvt. Ltd. vs. ITO dated 16.4.2024 passed by the ITAT, Delhi wherein, it was held in para 15 that amendment by the CBDT is curative an....
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....all be deemed to be the fair market value of such shares." 13. From perusal of above notification, it is evident that where the difference between the issue price and value adopted by the AO is 10% or less, in such cases issue price will be deemed to be the fair value of shares for the purpose of Rule 11UA of the Income Tax Rules, 1962. In the present case the issue price is Rs. 15 per share and the value adopted by the AO is Rs. 14.68/per share, hence the difference between the issue price and value adopted by AO is Rs. 0.32 i.e. 2.21% (0.32/15) which is less the then the safe harbor of 10% variation in value introduced by CBDT notification 81/2023 dated 25.08.2023. 14. Hence, in view of above mentioned submission and cur....
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....he 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 retrospective. The Patna High C....
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....ote the plea that the amendment was intended to cure a hardship and hence retrospective has been duly accepted in the ITAT decision referred in the assessee's submission above. Moreover, the speech of Hon'ble Finance Minister while introducing the provisions duly support this premise. Moreover, in such situation curative provision to remove hardship should be retrospective is duly supported by Hon'ble Supreme Court decision in the case of Allied Moters (P) Ltd. (91 Taxman 205) by the following exposition. "A proviso which is inserted to remedy unintended consequences and to make the proviso workable, a proviso which supplies an obvious omission in the section and is require to be read into the section to give the section a ....