The AO\u00a0 made addition u\/s 56(2)(viia) of the Act\u00a0 by treating the difference between the fair value of the shares and the purchase price of shares of the shares by the assessee. CIT(A) confirmed the order of the\u00a0 AO. Tribunal held that rejection of DCF method is held to be not proper.\u00a0\u00a0\u00a0 Tribunal held that S. 56(2)(viia) cannot apply to a foreign company as Rule 11U(b)(ii) (prior to 01.04.2019) which defines “balance sheet\u201f was not applicable to a foreign company. If the computation provisions cannot apply, the charging section cannot apply. The amendment to Rule 11U with effect from 1.4.19 is prospective in nature\u00a0 .( Followed CIT v. B. C. Srinivasa Shetty ( 1981) \u00a0128 ITR 294 (SC), CIT v. Official Liquidator Palai Central Bank Ltd(In liquidation) \u00a0(1985) 1 SCC 45) .( ITA No.1703\/Mum\/2019, dt. 16.10.2019)(AY. 2015-16)<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 56 : Income from other sources \u2013Foreign company \u2013DCF Method- Receipt of property less than aggregate fair value of the property – S. 56(2)(viia) cannot apply to a foreign company as Rule 11U(b)(ii) (prior to 01.04.2019) which defines “balance sheet\u201f was not applicable to a foreign company-If the computation provisions cannot apply, the charging section cannot apply. The amendment to Rule 11U with effect from 1.4.19 is prospective in nature \u2013Rejection of DCF method is held to be not proper. [ S.56(2) (viia), Rule 11UA(b) (ii) ]<\/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":[1],"tags":[],"class_list":["post-8241","post","type-post","status-publish","format-standard","hentry","category-digest"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-28V","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/8241","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=8241"}],"version-history":[{"count":5,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/8241\/revisions"}],"predecessor-version":[{"id":19689,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/8241\/revisions\/19689"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=8241"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=8241"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=8241"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}