The Tax Publishers2020 TaxPub(DT) 0906 (Kol-Trib) : (2020) 181 ITD 0010 : (2020) 205 TTJ 0611

INCOME TAX ACT, 1961

Section 263

AO had called upon assessee to furnish name, address, PAN and other details to whom shares were allotted with evidence and applicabiltiy of section 56(2)(viib) AO had taken note that assessee had issued shares at face value of Rs. 10 with premium of Rs. 140 per share. Assessee had duly explained as to how value of Rs. 150 per share was the fair value of shares which had been worked out by obtaining certificate from Chartered Accountants. Also, assessee furnished copy of Chartered Accountant's Certificate regarding valuation of shares. Thus, view taken by AO after due enquiry on the issue was plausible one and order passed by AO could not be held as erroneous and prejudicial.

Revision under section 263 - Erroneous and prejudicial order - AO after due enquiry made no addition under section 56(viib) towards valuation of shares issued by assessee -

Pr.CIT noticed that assessee issued 8,00,000 shares with a share premium of Rs. 140 and face value of Rs. 10 totaling to Rs. 150 per share which exceeded fair market value of share determined as per section 56(viib) read with rules 11U and 11UA at Rs. 23 per share. Accordingly, Pr.CIT held assessment order as erroneous and prejudicial to the interest of revenue on the ground of AO not having made addition to assessee's income.Held: AO had called upon assessee to furnish name, address, PAN and other details to whom shares were allotted with evidence and applicabiltiy of section 56(2)(viib). AO had taken note that assessee had issued shares at face value of Rs. 10 with premium of Rs. 140. per share. Assessee had duly explained as to how value of Rs. 150 per share was the fair value of shares which had been worked out by obtaining certificate from Chartered Accountants. Also, assessee furnished copy of Chartered Accountant's Certificate regarding valuation of shares. Thus, view taken by AO after due enquiry on the issue was plausible one and order passed by AO could not be held as erroneous and prejudicial.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2013-14

IN THE ITAT KOLKATA 'C' BENCH

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