Rule 11UA(2) is applicable to unquoted equity shares & not to preferential shares

Kheer Bhawani Trading P. Ltd Vs ITO (ITAT Delhi) On behalf of the assessee it was submitted that assessee had merely issued preferential shares and as for the purpose of Section 56(2)(viib) of the Act, the Rule 11UA (2) is not applicable. It was submitted that assessee has issued preferential shares and the valuation under Rule 11UA(2) is applicable only to unquoted equity shares. It was submitted that in fact Rule 11UA(1) Sub clause (c) was applicable which prescribes method for determination of value of unquoted shares and securities other than equity shares it was submitted that the AO arbi...