NAVKAR WOLLENS PRIVATE LIMITED,BIKANER vs. ACIT CIRCLE-3, BIKANER

ITA 670/JODH/2025Status: DisposedITAT Jodhpur26 February 2026AY 2014-15Bench: DR. MITHA LAL MEENA, HON’BLE (Accountant Member), SHRI SUDHIR PAREEK, HON’BLE (Judicial Member)9 pages
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What did the Tribunal hold?

The Tribunal held that the assessee had the option to choose a valuation method under Rule 11UA and had substantiated its valuation using the market/stamp duty value of land. The AO could not impose his own valuation method without disproving the assessee's claim. Therefore, the addition made by the AO was deleted.

What were the facts?

The assessee company issued shares at a premium, valuing its land at market value (Rs. 2,45,50,000) instead of book value (Rs. 66,87,650) for calculating the fair market value (FMV) of shares. The Assessing Officer (AO) made an addition of Rs. 2,34,04,480 under Section 56(2)(viib) for the difference between the FMV and issue price, which was upheld by the CIT(A).

What were the issues?

Whether the AO was justified in rejecting the assessee's chosen method of valuing shares under Rule 11UA by substituting the market value of land with its book value, leading to an addition under Section 56(2)(viib).

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 56(2)(viib)

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Income Tax Appellate Tribunal, JODHPUR BENCH, JODHPUR

For Appellant: Shri Rajendra Jain, Advocate and Smt, CA (Physical)
For Respondent: Smt. Runi Pal, CIT-DR and Shri Lalit Kumar, DR (Virtual)
Hearing: 29.01.2026

DR. MITHA LAL MEENA, A.M.: This appeal is filed by assessee against the order of National Faceless Appeal Centre Delhi [hereinafter referred to as NFAC/CIT(A)] dated 30.07.2025 with respect to Assessment Year 2014-15 challenging therein sustaining the addition of Rs. 2,34,04,480/- on account of difference between the Fair Market Value and the issue price of the equity shares by questioning the method of valuation.

2.

Grounds of Appeal are as under:

2 Asst. Year: 2014-15

1.

The Ld. AO was wrong in law as well as in facts in making an addition of Rs. 2,34,04,480/- on account of alleged difference between the FMV and issue price of equity s

The order continues below.

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