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| The Tax Publishers2020 TaxPub(DT) 0712 (Chen-Trib) INCOME TAX ACT, 1961
Section 56(2)(viib)
Where CBDT by Circular, dt. 30-8-2019, the copy of which was available on record, made it clear that when assessee was a recognized start-up company having filed declaration in Form 2, provisions of section 56(2)(viib) should not be made applicable, addition made by AO was deleted and appeal filed by assessee was allowed.
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Income from other sources - Addition made under section 56(2)(viib) - Addition with regard to valuation of shares -
This appeal of assessee was directed against the order passed by CIT(A). The notice of hearing was issued by this Tribunal, however the postal authorities returned the RPAD with an endorsement 'No such company'. This Tribunal had no machinery to trace out the assessee and serve notice. Revenue held that assessee was a recognized start-up company and CBDT issued a circular clarifying that there could not be any addition with regard to valuation of shares under section 56(2)(viib). In view of this circular, Department could not enforce the outstanding demand. Hence, appeal had to be allowed. Held: CBDT by Circular, dt. 30-8-2019, the copy of which was available on record, made it clear that when assessee was a recognized start-up company having filed declaration in Form 2, the provisions of section 56(2)(viib) should not be made applicable. This Tribunal was of considered opinion that authorities were not justified in making any addition. Accordingly, addition made by AO was deleted and appeal filed by the assessee allowed.
REFERRED :
FAVOUR : In assessee's favour
A.Y. : 2015-16
IN THE ITAT, CHENNAI B BENCH
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