The assessee issued shares at a premium and furnished a valuation report of a Chartered Accountant adopting the Discounted Cash Flow (DCF) Method for determining the fair market value of shares. The Assessing Officer rejected the valuation and made an addition under section 56(2)(viib) alleging that the shares were issued at a value exceeding their fair market value. Tribunal held that the amendment to Rule 11UA introducing the DCF Method is procedural in nature and is applicable to pending proceedings. Since the assessee had furnished a valid valuation report prepared by a Chartered Accountant adopting the prescribed DCF Method and there was no material to establish overvaluation of shares, the addition under section 56(2)(viib) was unsustainable and liable to be deleted.(AY.2013-14)<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 56: Income from other sources-Issue of shares at premium -Fair Market Value -Discounted Cash Flow (DCF) Method -Amendment to valuation rules -Applicable to pending proceedings -Addition was deleted. [S. 56(2)(viib), R.11UA (2)(b)]<\/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_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[21],"tags":[],"class_list":["post-62521","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-ggp","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/62521","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=62521"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/62521\/revisions"}],"predecessor-version":[{"id":62522,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/62521\/revisions\/62522"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=62521"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=62521"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=62521"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}