{"id":1013,"date":"2020-08-28T03:00:00","date_gmt":"2020-08-28T03:00:00","guid":{"rendered":"http:\/\/snpaul.com\/wp57\/?p=1013"},"modified":"2020-08-28T03:00:00","modified_gmt":"2020-08-28T03:00:00","slug":"section-562viib-rule-11ua-the-assessee-has-the-choice-to-choose-a-prescribed-method-for-ascertaining-the-market-value-of-the-shares-transferred-if-the-assessee-has-chosen-one-method-of-valuatio","status":"publish","type":"post","link":"https:\/\/snpaul.com\/?p=1013","title":{"rendered":"Section 56(2)(viib)\/ Rule 11UA: The assessee has the choice to choose a prescribed method for ascertaining the market value of the shares transferred. If the assessee has chosen one method of valuation provided under Rule 11UA (i.e. DCF method), the Assessing Officer has no power or jurisdiction to change that method to another method"},"content":{"rendered":"<p><a href=\"https:\/\/www.itat.gov.in\/files\/uploads\/categoryImage\/1596188593-ITA%203955%20OF%20KARMIC%20LABS.pdf\">Karmic Labs (P) Ltd v. ITO \u2013 Date of Judgement : 28.07.2020 (ITAT Mumbai)<\/a><\/p>\n<p>ITA No.3955\/Mum\/2018<\/p>\n<p>&nbsp;<\/p>\n<p>The ld. Assessing Officer observed that since, the liabilities exceeds the assets of the company as calculated in para 5.8 of the assessment order, the fair market value of the shares is negative and hence, the market value is taken at face value of Rs. 10\/- each and accordingly, the share premium received of Rs. 3,96,54,531\/- was added back to the total income of the assessee under section 56(2)(viib) of the Income Tax Act. In the appellate proceedings, the Ld. CIT(A) dismissed appeal of the assessee<br \/>\nSection 56 allows the assessees to adopt one of the methods of their choice. But, the Assessing Officer held that the assessee should have adopted only one method for determining the value of the shares. In our opinion, it was beyond the jurisdiction of the Assessing Officer to insist upon a particular system, especially the Act allows to choose one of the two methods. Until and unless the legislature amends the provision of the Act and prescribes only one method for valuation of the shares, the assessee are free to adopt any one of the methods. The appeal of the assessee is allowed. (Related Assessment Year : 2014-15)<\/p>\n ","protected":false},"excerpt":{"rendered":"<p>Karmic Labs (P) Ltd v. ITO \u2013 Date of Judgement : 28.07.2020 (ITAT Mumbai) ITA No.3955\/Mum\/2018 &nbsp; The ld. Assessing [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/snpaul.com\/index.php?rest_route=\/wp\/v2\/posts\/1013"}],"collection":[{"href":"https:\/\/snpaul.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/snpaul.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/snpaul.com\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/snpaul.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1013"}],"version-history":[{"count":1,"href":"https:\/\/snpaul.com\/index.php?rest_route=\/wp\/v2\/posts\/1013\/revisions"}],"predecessor-version":[{"id":1014,"href":"https:\/\/snpaul.com\/index.php?rest_route=\/wp\/v2\/posts\/1013\/revisions\/1014"}],"wp:attachment":[{"href":"https:\/\/snpaul.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1013"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/snpaul.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1013"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/snpaul.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1013"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}