Case Law Details
Abhinav International Pvt. Ltd. Vs DCIT (ITAT Delhi)
In the present case, the assessee is saying that value of the shares owned by the assessee company of the listed companies which are recorded at the book value (cost price) is far less than the listed price (traded price) of those shares, therefore, same should be taken while determining the fair market value of its shares in accordance with the provisions of section 56 (2) of the act. Principally, we agree with the argument of the Ld. AR, that if assessee can substantiate that fair market value of its shares is higher than the valuation determined in accordance with the rules framed there under, then, higher of the above should be considered for working out income u/s 56(2) of the act. However, assessee has to satisfy the assessing officer and it is only the satisfaction of the assessing officer, which is required for working out fair market value of shares. As the lower authorities stated that assessee has not produced anything to substantiate the above claim of the assessee, they disbelieved it. Before us, assessee has submitted the quotation at the National stock exchange of share price of Hanung Toys and Textiles Ltd on 7 November 2012 at ₹ 138.80 per share. However, these details have not been noted by the lower authorities. In view of the above facts, we set aside this ground back to the file of the Assessing Officer with a direction to the assessee to substantiate the fair market value of its shares by incorporating the market value of the listed equities owned by it, as demonstrated before us. The assessing officer may examine the claim of the assessee on the merits of the case and then decide the fair market value of the shares of the assessee company as on the date on which the new issue of shares has been allotted to the new allottees. In the result, ground number three of the appeal of the assessee is allowed with above direction.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal is filed by the assessee against the order dated 09/11/2016 passed by CIT(A)-1, New Delhi for Assessment Year 2013-14.
2. The grounds of appeal are as under:-
Please become a Premium member. If you are already a Premium member, login here to access the full content.
