No Addition u/s 56(2)(viib) as Rule 11UA Permits 10% Tolerance on Issue Price vs FMV

Go Fashion (India) Ltd. Vs PCIT (ITAT Chennai) Conclusion: The difference in the fair market value and the issue price of compulsory convertible preference shares was only 0.65%, therefore as per Rule 11UA issue price was deemed to be fair market value and hence no scope for addition required to be made u/s. 56(2)(viib). Held: Assessee-company had issued compulsory convertible preference shares raising Rs. 100 crore under a private equity investment made by ICICI Venture through India Advantage Fund S4-I. The shares were issued for Rs. 416.69 per share, while the Fair Market Value ( FMV ) of t...