2026 (8) TMI 1106

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....cer dated 7.3.2024 under Section 143(3) r.w.s. 144B of the Income Tax Act ('the Act' in short) for AY 2022-23. 2. The only issue in this appeal of the assessee is as regards the order of the CIT(A) confirming the action of the AO in making addition u/s. 56(2)(viib) of the Act being difference between the issue price and valuation price of shares calculated as per Rule 11UA(2) ignoring that the issue price and valuation price, differential is less than 10%. For this, assessee has raised following ground no. 1 : "The Ld. CIT(A) is wrong in confirming the addition of Rs. 19,14,250/- made by the AO under Section 56(2)(viib) on account of difference between the issue price and valuation price of share calculated as per Rule 11UA(2) b....

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....reported in Audit Report and ITR. Accordingly, notice u/s. 143(2) was issued and duly served upon the assessee on 2.6.2023, thereafter notices u/s. 142(1) were issued from time to time. During the course of assessment proceedings, notice u/s. 143(2) and 142(1) were issued, calling for requisite details. In response, the assessee furnished submissions and documents from time to time. Upon verification, most of the issues were accepted by the AO. However, with regard to the issue of share premium, the AO observed that during the year under consideration, the assessee had issued 1,23,500 shares at a price of Rs. 405 per share (face value of Rs. 100 and share premium of Rs. 305) to its existing shareholders, some of whom were directors or pr....

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....t Rs. 64,33,83,440/-. Against the aforesaid addition, the assessee preferred the appeal before the Ld. CIT(A), who vide his impugned order has affirmed the action of the AO. Aggrieved, assessee is in appeal before us. 4. At the time of hearing, Ld. AR has submitted that the addition of Rs. 19,14,250/- made by the AO under Section 56(2)(viib) on account of difference between the issue price and valuation price of share calculated as per Rule 11UA(2) by ignoring the provision of Rule 11UA(4), which provides that if the issue price does not exceed the valuation price by more than 10 per cent, such issue price shall be deemed to be the Fair Market Value (FMV) of share. He further submitted that in the present case, the difference between the....