Assessee-company issued certain equity shares to a company at a premium of Rs. 590 per share.\u00a0 Assessee had opted for valuation as per DCF method.\u00a0 Assessing Officer held\u00a0 that assessee had not given any justification for charging such a huge premium.\u00a0 He further held that assessee was incurring losses during subsequent assessment year 2018-19.\u00a0 Accordingly, he treated value of premium on shares at Rs. Nil.\u00a0 He invoked provisions of section 56(2)(viib) and disallowed entire share premium. CIT(A) deleted the addition. On appeal the Tribunal held that\u00a0 CA had arrived at fair market value (FMV) of shares at premium at Rs. 735 per share.\u00a0 Share premium charged by assessee was lower than FMV determined by auditor. Further, Assessing Officer treated value of premium on shares at Rs. Nil without following any of methods prescribed under relevant Rules. It was also evident from record that Assessing Officer compared financials of assessee and “projected summarised financials” in valuation report which were not exact and could undergo change so as to held that assessee had in fact incurred loss during assessment year 2018-19. On facts, section 56(2)(viib) is\u00a0 not applicable to case of assessee and,\u00a0 addition made under section 56(2)(viib) is\u00a0 deleted. (AY. 2016-17)<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 56 : Income from other sources-Issue of shares at premium-DCF method-Share premium charged was lower than fair market value of shares determined by auditor-Section 56(2)(viib) could not be applicable. [S. 56(2)(viib)] <\/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-47910","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-csK","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/47910","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=47910"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/47910\/revisions"}],"predecessor-version":[{"id":47911,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/47910\/revisions\/47911"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=47910"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=47910"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=47910"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}