Held that assessee issued/allotted equity shares at a premium, however, did not file any valuation report to substantiate fair market value of shares issued in terms of section 56(2)(viib)(a)(i) and rule 11UA, Assessing Officer could not have accepted intrinsic value without calling for a value in terms of rule 11UA to find out whether clause (i) or clause (ii) of Explanation to section 56(2)(viib) would be applicable. Section 56(2)(viib) is applicable in year in which shares were issued and not in year of receipt of premi um. (AY. 2015-16)
Medicon Leather (P) Ltd. v. ACIT (2022) 194 ITD 44 (Bang.)(Trib.)
S. 56 : Income from other sources-Share premium-Valuation report-Apart from determination of FMV of shares under rule 11UA, intrinsic value is also one of prescribed method as per section 56(2)(viib)(a)(ii), but higher of valuation as per section 56(2)(viib)(a)(i) or (ii) has to be considered by Assessing Officer before applying those provisions Section 56(2)(viib) is applicable in year of issue of shares and not in year of receipt of premium. [S. 56(2)(viib), R. 11UA]