The Assessee company was incorporated on basis of a joint venture agreement between a resident company and a non-resident company. Both joint venture partners agreed to contribute project costs in a ratio of 40 per cent by non-residents and 60 per cent by residents. Assessee issued shares at Rs. 60 per share to non-resident shareholders while shares to the resident company were issued at Rs. 40 per share.\u00a0 AO rejected the valuation of shares for reason that shares issued to the resident company were at a much lesser price than shares that were allotted to the non-resident company. AO also held that there was a loss in previous assessment years, therefore, the value determined by DCF Method was not correct and he made an addition under section 56(2)(viib)\u00a0 of the Act.\u00a0 On appeal, CIT(A) deleted the addition. On appeal by Revenue, the Tribunal held that the difference in amount had occurred due to a difference in shares of capital contribution to the project cost. Accordingly, the order of CIT(A) was affirmed. (AY. 2014-15)<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 56 : Income from other sources-Non-resident-Valuation of shares-Shares issued higher amount than to resident shareholders-Addition was not justified. [S. 56(2)(viib), Rule 11UA] <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-33852","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-8O0","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/33852","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=33852"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/33852\/revisions"}],"predecessor-version":[{"id":33853,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/33852\/revisions\/33853"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=33852"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=33852"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=33852"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}