Case Law Details
M/s. Kottaram Agro Foods Pvt. Ltd. Vs ACIT (OSD) (ITAT Bangalore)
At the very outset, it was submitted by ld. DR of revenue that as per para 4.2 of the assessment order for Assessment Year 2014-15 and para no. 4.3 of the assessment order for Assessment Year 2015-16, it is noted by the AO that person who is said to have valued the share of the assessee company as on 15.11.2013 and 02.05.2014 respectively is none other than the person who has signed the Audit report u/s. 44AB of IT Act. He further pointed out that this is also noted by AO in same two paras of assessment order that Rule 11U(a) of Income Tax Rules, 1962, defines “accountant” as “for the purposes of sub-rule (2) of Rule 11UA means a fellow of the Institute of Chartered Accountants of India within the meaning of the Chartered Accountants Act, 1949 (38 of 1949) who is not appointed by the company as an auditor under section 44AB of the Act or under section 224 of the Companies Act, 1956 (1 of 1956):” He submitted that because of this, the valuation report submitted by the assessee has to be ignored because the same is not as per Rule 11UA and therefore, the action of the AO in determining the fair market value on the basis of NAV should be upheld. In reply, the ld. AR of assessee submitted that the valuation report available on pages 38 to 54 of paper book dated 02.02.2012 relating to value of the shares of the appellant as on 31.03.2012 is signed by a different Chartered Accountant i.e. Manohar S Shet and as per the audited accounts of the assessee for the year ending 31.03.2014 including Tax Audit Report for Assessment Year 2014-15 available on pages 3 to 37 of paper book, these are signed by a different Chartered Accountant Sudhakar S. Prabhu for Amarnath Kamath & Associates and therefore, this is not proper on the part of the AO to say that the valuation report is signed by the auditor. Regarding valuation report as on 31.03.2013 available on pages 95 to 107 of paper book, he submitted that this valuation report is signed by Amarnath Kamath & Associates but as per the audited accounts for the year ending 31.03.2015 including tax audit report for Assessment Year 2015-16 available on pages 72 to 94 of paper book, it can be seen that the same is also signed by Amarnath Kamath & Associates but only for this reason, it can be said that the valuation is not proper. Reliance was placed by him on a Tribunal order rendered in the case of M/s. Vaani Estates Pvt. Ltd. Vs. ITO as reported in (2018) 172 ITD 629 and also on another Tribunal order rendered in the case of Rameshwaram Strong Glass (P) Ltd. Vs. ITO as reported in (2018) 172 ITD 571.
I have considered the rival submissions. First of all, I reproduce the relevant Rule i.e. Rule 11U(a). The same is as under.
“11U. For the purposes of this rule and rule 11UA,-
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