Case Law Details
DCIT Vs Avigna Housing Pvt. Ltd. (ITAT Chennai)
we are of the considered view that fair market value of shares considered by the assessee under DCF method is one of the accepted method of valuation of shares under Rule 11UA and such value of shares is supported by necessary supporting evidences including valuation report as on the date of issue of shares. The value adopted by the Assessing Officer under net asset value method even though a prescribed method does not give correct value of shares in the given facts and circumstances of the case, because amended provisions of Rule 11UA by the Finance Act, 2017 w.e.f 01.04.2018 has permitted valuation of immovable property as per guidance value for the purpose of valuation of shares. In this case, if stock in trade held by the assessee in the form of immovable property has been valued as per guidance value, then value of one equity share works out to Rs. 1,00,380/-, which is almost equal or nearer to value arrived at by the assessee under DCF method. Therefore, value of shares arrived at by Assessing Officer under net asset value method cannot be accepted. Therefore, we are of the considered view that the learned CIT(A), after considering the relevant facts has rightly deleted the additions made by the Assessing Officer towards excess premium charged on issue of shares u/s.56(2)(viib) of the Act. Hence, we are inclined to uphold the findings of the learned CIT(A) and dismiss the appeal filed by the Revenue.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal filed by the Revenue is directed against the order of the learned CIT(Appeals)-4, Chennai dated 28.12.2018 and pertains to assessment year 2015-16.2.
2. The Revenue has raised the following grounds of appeal:-
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