FMV of Shares Must Follow Rule 11UA — Ad-hoc Mark-Up of Assets Not Permissible u/s 56(2)(iia)

ITO Vs Gold Souk Finance Private Limited (ITAT Delhi)

The ITAT Delhi dismissed the Revenue’s appeal and upheld the deletion of addition made u/s 56(2)(iia), holding that fair market value of shares has to be computed strictly in accordance with Rule 11UA, and the Assessing Officer cannot substitute it with arbitrary mark-ups to underlying assets.

The Tribunal noted that the AO had e

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