Case Law Details
ND’s Art World Pvt. Ltd Vs ACIT (ITAT Mumbai)
ITAT Mumbai held that addition towards difference of share premium u/s. 56(2)(viib) of the Act by rejecting the valuation determined by the assessee without referring the matter for valuation to DVO is unjustified. Matter remanded for referring the same to DVO.
Facts- The assessee’s case was selected for limited scrutiny under CASS and the assessment was completed u/s. 143(3) of the Act dated 28.12.2018, where AO determined the total income at Rs.23,68,86,730/- by making various additions/disallowances.
AO had called for calculation of share premium where the assessee company had issued 1780 shares with face value of Rs.10/-and premium of Rs.98,280/-. The assessee was also sought for to furnish financials of A.Ys. 2016-17 and 2017-18 and on perusal of the same, it was found that the assessee has increased value of the asset by calculating upward revaluation in the balance sheet of A.Y. 2015-16 thereby arriving at the valuation of the shares at higher value of the assets under Rule 11UA of the Act. AO made an addition on the difference of share premium of Rs.80,465/- per share aggregating to Rs.14,33,27,700/-, thereby disallowing u/s. 56(2)(viib) of the Act. Further, AO also confirmed addition u/s. 36(1)(vii) of the Act.
CIT(A) confirmed the addition. Being aggrieved, the present appeal is filed.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
