2025 (4) TMI 1360

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....Delhi-4/10578/2019-20 passed u/s 250 of the Income Tax Act, 1961 (the Act, in short). 2. The only effective ground of appeal taken by the assessee is against the confirmation of the addition of 26342586/- made u/s 56(2)(viib) of the Act after rejecting the valuation report submitted by the assessee. 3. Brief facts of the case are that assessee is a private limited company and e-filed its return of income on 12.09.2017 declaring total income at Rs. 4,67,930/-. The case of the assessee was selected under CASS for limited scrutiny for the reason "large share premium receipt during the year. To verify the applicability of section 56(2)(viib) of the Act". Thereafter the Assessing Officer has examined the issue of shares at premium by the a....

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.... to which value per share was worked out at Rs. 83.03 per share. While calculating the valuation, valuer has adopted the circle rate of the immovable properties which is in accordance with the amended provisions of rule 11UA(1)(c)(b) which is meant for valuation of unquoted shares. Ld.AR drew our attention to the amendment made in Rule 11UA(1)(c)(b) made by IT (Twentieth Amndt.) Rules, 2017 wherein it is provided that the value adopted or assessable by any authority of the government for the purpose of payment of stamp duty in respect of the immovable property is to be taken. He further submitted that the Assessing Officer has taken the book value of the immovable property for the purpose of determination of fair market value of the unquote....

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....les, 1962 whether the book value of the immovable property is to be taken or the circle rate of immovable property is to be considered for the purpose of valuation. From the perusal of the provisions of rule 11UA(1)(c)(b) it is seen that the amendment referred by the ld.AR has taken place w.e.f. 1.4.2018 and applicable from AY 2018-19 and subsequent assessment years. However the Explanation (a) of section 56(2)(viib) provides as under: 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 Office....