Dismissing the appeal the Court held that\u00a0 the shares had come into existence only when the allotment was made by the company as rights shares cannot be said to be \u201creceived from any person\u201d. The shares which had been allotted to the assessee were not \u201creceived from any person\u201d which was the fundamental requirement for invoking section\u00a056(2)(vii)(c)\u00a0of the Act. In other words, the property must pre-exist for application of section\u00a056(2)(vii)(c), which is clear from the intention of the Legislature. Regarding the issue of 82,200 shares, the names of the wife and father of the assessee would also not be hit by the provisions of section\u00a056(2)(vii)(c)\u00a0of the Act as both of them would be covered by the definition of \u201crelative\u201d covered in the exemption of relative, and therefore, the provisions of section\u00a056(2)(vii)(c)\u00a0would not be applicable at all. With regard to the application of section\u00a056(2)(vii)(c)\u00a0of the Act for the balance 14,800 shares allotted to the assessee as a result of third party shareholder declining to apply for rights shares in favour of the assessee, the Tribunal held against the assessee because renunciation of rights in favour of the assessee by the third party who was not related would lead to disproportionate allocation of shares in favour of the assessee. The findings recorded about valuation of shares to Rs. 205.55 were concurrent findings of fact which did not require any interference. The Commissioner (Appeals) had rightly computed the fair market value on the basis of the balance-sheet which was available on record for the previous year and which was approved in the annual general meeting.(AY.2013-14)<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 56 : Income from other sources-Right shares-Allotted to proportionate to shareholding in company-Provision is not applicable in respect of allocation of rights shares allotted below FMV proportionate to his shareholding in company-Gifts-Additional shares received on account of renunciation of rights issue by wife and father-Relatives-Excluded from purview of operation of section 56(2)(vii)(c)-Share premium-Balance sheet-Balance sheet is not drawn up on date of allotment, for arriving at FMV of shares under section 56(2)(vii)(c)(ii), previous balance sheet which is audited and approved in AGM has to be taken into consideration, before allotment of share. [S. 56(2)(vii)(c), R.11UA(1)(c)] <\/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-45793","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-bUB","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/45793","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=45793"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/45793\/revisions"}],"predecessor-version":[{"id":45794,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/45793\/revisions\/45794"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=45793"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=45793"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=45793"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}