TaxTMI 
TaxTMI 
2026 (7) TMI 963
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.... raised in ground nos.1 to 4 is against the order of ld. CIT(A) deleting the addition of Rs.3,36,00,000/- by accepting the fair market value of share at Rs.375 as against the addition made by the AO on fair market value determined at Rs.207. 3.1. The facts in brief are that the case of the assessee was selected for limited scrutiny for examination of investments/ advance loans and share premium. The assessee filed the return of income on 18.09.2018, declaring nil income. The ld. AO during the course of assessment proceedings, noted that the assessee has issued fresh share during the year and accordingly, assessee was issued notices u/s 143(2) and 142(1) of the Act to furnish the details, with respect to the increase in share capital/ introduction of share premium. During the year, the assessee issued 2 lacs equity shares of face value Rs.10 each to PDK Impex Limited at a premium of Rs.375/- per share based on the valuation report by the Chartered Accountant Shri Sashi Agarwal. However, the ld. AO rejected the same on the ground that the assessee has not provided any sound analysis and computation of valuation of share premium. Accordingly, the ld. AO computed the value of premiu....
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....om the judgement of the Hon'ble ITAT, Bangalore bench in the case of TUV Rheinland NIFE Academy Pvt. Ltd. vs. ITO and Hon'ble ITAT A bench, New Delhi in the case of Agro Portfolio Pvt. Ltd. vs ITO (94Taxmann.com112) 14. At the outset it is seen that the lacunas pointed out are more in the nature of suspicion/conjectures, bearing out of lack of opportunity to peruse the detailed working and findings of the valuation report. With regard to the above, the appellant has made the following submission: "Further to our submission made earlier along with various annexures in support of this said as already uploaded by us and available at the portal, we further submit herewith as under; 1. In respect of the Ld. AO's allegation that he was not provided the working of the valuation made at Rs. 385.41 per share as determined by the valuer. Please note that the Ld. AO despite of having sufficient time at its disposal to set over the submission, did not make any attempt whatsoever to seek such support working of the valuation report. We are enclosing herewith the full workings of the valuation made by the valuer. It may kindly be noted that the working was an integral ....
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....AO in para 5.5 of the order for determining the fair market value of unquoted equity shares which is as under; Fair Market Value of Unquoted Equity Share=(A-L)*PV/PE. (Details as per relevant paragraph of Assessment order.) Please note that with effect from 29/11/2012, the fair market value of unquoted equity hare is to be derived as per the method as detailed in the separate note annexed herewith." 15. Having perused the valuation report along with the working and the valuation of properties, I find merit in the appellant's rebuttal above. Now coming to the two case laws relied upon by the AO viz. Hon'ble ITAT-A bench of New Delhi in the case of Agro Portfolio(P) Ltd. Vs ITO (94 taxmann.com112) and another decision of Hon'ble Bangalore ITAT (dated 27.02.2019) the case of TUV Rheinland NIFE Academy Pvt. Ltd. vs. ITO, which has followed and relied upon in the above-mentioned Delhi ITAT judgment. In both the said judgments valuation report was rejected as the same was not substantiated or verified by the taxpayer. The AO has relied upon the said judgments to reject Valuation report submitted before him in support of FMV of the shares of Assessee de....
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....he ld. AO instead of referring the matter to the valuation cell himself calculated the value of the share by applying the NAV method as per Rule 11UA(2) and determined the value at 207.73. In our opinion, the action of the ld. AO in valuing the share premium is not acceptable as he is not an expert to do the job. The ld. CIT (A) noted that the ld. AO has only rejected the valuation on the ground that no basis of valuation were provided and thus, observed that the ld. AO's observations are based upon suspicion and conjectures and non-examination of detailed working and findings given in the valuation report. Accordingly, we do not find any infirmity in the order of ld. CIT (A) which is a very speaking and reasoned order. Consequently, we uphold the order of ld. CIT (A) and by dismissing the ground raised by the revenue. Accordingly, ground no.1 to 4 raised by the Revenue are dismissed. 4. The issue raised in ground no.5 is against the disallowance of Rs.36,22,650/- by the ld. CIT (A) as made by the ld. AO on account of disallowance of expenses. 4.1. The facts in brief are that the case of the assessee was selected for examination of advance/ advance loans and share premium as ....
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.... (a) Whether in the facts and circumstances of the case and in law the Learned Tribunal has committed substantial error in law in deleting the disallowance of carry forward of losses of earlier years ? (b) Whether the Learned Tribunal has substantially erred in law in holding that the Assessing Officer exceeded his jurisdiction in enquiring into those issues which were beyond the scope of limited scrutiny, without taking into consideration the fact that the claim of the assessee pertaining to carried forward losses was inadmissible since the beginning itself and therefore the Assessing Officer was justified in disallowing the same without converting the case into complete scrutiny ? 5. We have heard Mr. Amit Sharma, learned standing Counsel appearing for the appellant and Mr. Abhratosh Majumder, learned senior Advocate for the respondent. 6. The short issue which falls for consideration in the instant case is whether the Assessing Officer exceeded his jurisdiction in completing the assessment on grounds which were not subject matter of the limited scrutiny. 7. The contention of the learned standing Counsel for the appellant is that the assessee....
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....cords on receipt of allegations of several irregularities and among other irregularities it was found that no reasons had been recorded for expanding the scope of limited scrutiny, no approval was taken from the PCIT for conversion of the limited scrutiny case to a complete scrutiny case and the order sheet was maintained very perfunctorily. Further, the CBDT has recorded that this gave rise to a very strong suspicion of mala fide intentions and the Officer concerned has been placed under suspension. Therefore, it was reiterated that the Assessing Officer should abide by the Instructions of CBDT while completing limited scrutiny assessment and should be scrupulous about maintenance of note sheets in assessment folders. 9. Thus, considering these aspects, we are of the view that the learned Tribunal rightly allowed the assessee's appeal on the said issue. This Court had an occasion to consider a somewhat similar issue in the case of Pr. CIT v. Sukhdham Infrastructures LLP, in [ITAT No. 164 of 2023, dated 14-8-2023]. In the said case an identical contention as raised before us was raised stating that at best the action of the Assessing Officer could be construed to be an....