SILLS KARINGATTIL JOSE,NEDUMKANDOM vs. ITO WARD 2, THODUPUZHA

ITA 132/COCH/2023Status: DisposedITAT Cochin19 November 2024AY 2016-17Bench: Shri Satbeer Singh Godara (Judicial Member), Shri Amarjit Singh (Accountant Member)20 pages
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What did the Tribunal hold?

The Tribunal held that the Gujarat High Court's decision regarding rights issues not attracting Section 56(2)(vii)(c) was not binding. However, it found merit in the assessee's argument regarding the valuation method, directing the Assessing Authority to refer the matter to the Valuation Officer.

What were the facts?

The assessee received unquoted shares of a company at a certain price. The Assessing Officer treated the difference between the fair market value (determined by NAV method) and the issue price as income under Section 56(2)(vii)(c)(ii). The assessee argued that the shares were received via a rights issue and that the valuation should be based on the DCF method.

What were the issues?

Whether shares received via a rights issue are taxable under Section 56(2)(vii)(c)(ii), and whether the NAV method is the appropriate valuation method when the assessee proposes DCF.

Which sections of the Income-tax Act were involved?

Section 56(2)(vii)(c)(ii), Section 142A(1)

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Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN

Before: Shri Satbeer Singh Godara & Shri Amarjit Singh

For Appellant: Shri P. M. Veeramani, CA
For Respondent: Smt. V. Swarnalatha, Sr. D.R
Hearing: 22.08.2024Pronounced: 19.11.2024

Per Satbeer Singh Godara, Judicial Member:

This assessee’s appeal for A.Y. 2016-17 arises against the CIT(A)/National Faceless Appeal Centre, Delhi’s DIN & Order No. ITBA/NFAC/S/250/2022-23/1047998328(1) dated 14.12.2022 in proceedings u/s. 250 of the Income Tax Act, 1961 (the Act).

2.

Heard both the parties. Case file perused.

3.

The assessee pleads the following substantive grounds in the instant appeal:

1.

The learned Commissioner of Income tax (Appeals)-12, Bengaluru has grossly erred in sustaining the addition in part, for the assessment year 2010-11, on the finding that 2 Sils Karingattil Jose the alleged agreement executed by the appellant will result into "transfer" of property as defined under section 2(

The order continues below.

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