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“fair market value”

Capital GainsSection 55(2)Section 55(2)2,353 judgments

The decision most relied on for fair market value is Sunil Kumar Agarwal v. CIT (372 ITR 83), cited in 159 judgments on BharatTax.

Leading authorities on fair market value

Sunil Kumar Agarwal v. CIT
372 ITR 83 · 2015 · High Court
159
citing judgments

The Assessing Officer is duty-bound to refer the valuation of property to the Departmental Valuation Officer under Section 50C(2) when an assessee disputes the stamp duty valuation or if there is a discrepancy between the actual sale consideration and the guideline value. This reference is mandatory, even if not explicitly requested by the assessee, to ensure a realistic fair market value and avoid injustice.

CIT v. ITC Ltd.
236 Taxmann 612 · 2016 · High Court
108
citing judgments

When computing deduction under Section 80IA, specifically for inter-unit transfer of power, the benefit cannot be claimed based on rates chargeable by distribution licensees to consumers. The deduction must be computed based on the rate fixed by the Tariff Regulation Commission for sale by electricity generating companies.

PCIT v. Chain House International (P) Ltd.
98 Taxmann.com 47 · 2018 · High Court
104
citing judgments

The Assessing Officer cannot arbitrarily reject a share valuation report prepared by an expert using recognized methods like NAV or DCF for the purpose of Section 56(2)(viib) without providing valid reasons to demonstrate its perversity or unreasonableness.

CIT v. Puja Prints
360 ITR 697 · 2014 · High Court
88
citing judgments

The amendment to Section 55A(a) of the Income-tax Act, 1961, which replaced "is less than" with "is at variance" as the condition for referring a valuation to a Departmental Valuation Officer, does not have retrospective effect. Consequently, for periods before July 1, 2012, a DVO reference is invalid if the declared value is not "less than" the fair market value.

Vodafone M-Pesa Ltd. v. PCIT
164 DTR 257 · 2018 · High Court
69
citing judgments

An assessee has the option to choose either the Discounted Cash Flow (DCF) method or the Net Asset Value (NAV) method for share valuation under Section 56(2)(viib) read with Rule 11UA. The Assessing Officer cannot substitute the chosen method or value without identifying a specific error in the assessee's valuation.

Hiaben Jayantilal Shah v. ITO
310 ITR 31 · 2009 · High Court
66
citing judgments

When an assessee presents a registered valuer's report for an asset, the Assessing Officer, if forming an opinion that the value claimed is less than the fair market value, must refer the valuation to the Valuation Officer under Section 55A(a). The AO cannot unilaterally reject the registered valuer's report or resort to Section 55A(b) in such a scenario.

CIT v. Smt. Nilofer I. Singh
309 ITR 233 · 2009 · High Court
55
citing judgments

The full value of consideration for computing capital gains under Section 48 refers to the amount stated in the sale deed and cannot be substituted by the market value or a valuation by the DVO under Section 55A, unless there is evidence that the assessee actually received a consideration in excess of the stated amount.

CIT v. Gillanders Arbuthnot & Co.
87 ITR 407 · 1973 · Supreme Court
51
citing judgments

The "full value of the consideration" for computing capital gains under Section 48 of the Income Tax Act, 1961 (or Section 12B(2) of the 1922 Act), means the price actually bargained for and agreed to by the parties, not the market value of the asset transferred. In a sale transaction involving a price, the market value of the consideration is not relevant.

Judgments citing fair market value

DCIT, Central Circle-17, New Delhi vs. Caddie Hotels Pvt Ltd., New Delhi

In the result the appeal of the assessee in ITA No

ITA 1724/DEL/2022[2017-18]Status: DisposedITAT Delhi21 Jul 2023AY 2017-18

Bench: Shri N.K. Billaiya & Shri Anubhav Sharma

For Appellant: Shri Ajay Vohra, AdvFor Respondent: Shri T. James Singson, CIT- DR
Section 143(3)Section 263Section 56(2)Section 56(2)(viib)

shares was made at the issue price of Rs. 99.72 i.e. face value of Rs. 10/- and share premium of Rs. 89.72. The Fair Market Value of the shares for the purpose of section 56(2)(viib) of the Act r.w.r. 11UA of the Income Tax Rules, 1962 was carried ... authorities. It is the say of the ld. counsel for the assessee that the NAV applied by the Assessing Officer for determining the Fair Market Value is full of mathematical errors and if those mathematical errors are corrected, there would be no difference between the value adopted by the assessee

DCIT, Central Circle-17, New Delhi vs. Caddie Hotels Pvt. Ltd., Delhi

In the result the appeal of the assessee in ITA No

ITA 1723/DEL/2022[2016-17]Status: DisposedITAT Delhi21 Jul 2023AY 2016-17

Bench: Shri N.K. Billaiya & Shri Anubhav Sharma

For Appellant: Shri Ajay Vohra, AdvFor Respondent: Shri T. James Singson, CIT- DR
Section 143(3)Section 263Section 56(2)Section 56(2)(viib)

shares was made at the issue price of Rs. 99.72 i.e. face value of Rs. 10/- and share premium of Rs. 89.72. The Fair Market Value of the shares for the purpose of section 56(2)(viib) of the Act r.w.r. 11UA of the Income Tax Rules, 1962 was carried ... authorities. It is the say of the ld. counsel for the assessee that the NAV applied by the Assessing Officer for determining the Fair Market Value is full of mathematical errors and if those mathematical errors are corrected, there would be no difference between the value adopted by the assessee

DCIT, Central Circle-17, New Delhi vs. Caddie Hotels P.Ltd, New Delhi

In the result the appeal of the assessee in ITA No

ITA 1722/DEL/2022[2015-16]Status: DisposedITAT Delhi21 Jul 2023AY 2015-16

Bench: Shri N.K. Billaiya & Shri Anubhav Sharma

For Appellant: Shri Ajay Vohra, AdvFor Respondent: Shri T. James Singson, CIT- DR
Section 143(3)Section 263Section 56(2)Section 56(2)(viib)

shares was made at the issue price of Rs. 99.72 i.e. face value of Rs. 10/- and share premium of Rs. 89.72. The Fair Market Value of the shares for the purpose of section 56(2)(viib) of the Act r.w.r. 11UA of the Income Tax Rules, 1962 was carried ... authorities. It is the say of the ld. counsel for the assessee that the NAV applied by the Assessing Officer for determining the Fair Market Value is full of mathematical errors and if those mathematical errors are corrected, there would be no difference between the value adopted by the assessee

DCIT, Central Circle-17, New Delhi vs. Caddie Hotels P.Ltd, New Delhi

In the result the appeal of the assessee in ITA No

ITA 1721/DEL/2022[2014-15]Status: DisposedITAT Delhi21 Jul 2023AY 2014-15

Bench: Shri N.K. Billaiya & Shri Anubhav Sharma

For Appellant: Shri Ajay Vohra, AdvFor Respondent: Shri T. James Singson, CIT- DR
Section 143(3)Section 263Section 56(2)Section 56(2)(viib)

shares was made at the issue price of Rs. 99.72 i.e. face value of Rs. 10/- and share premium of Rs. 89.72. The Fair Market Value of the shares for the purpose of section 56(2)(viib) of the Act r.w.r. 11UA of the Income Tax Rules, 1962 was carried ... authorities. It is the say of the ld. counsel for the assessee that the NAV applied by the Assessing Officer for determining the Fair Market Value is full of mathematical errors and if those mathematical errors are corrected, there would be no difference between the value adopted by the assessee

Caddie Hotels Pvt. Ltd., Delhi vs. Pr. CIT Central Circle 17, Delhi

In the result the appeal of the assessee in ITA No

ITA 2014/DEL/2021[2014-15]Status: DisposedITAT Delhi21 Jul 2023AY 2014-15

Bench: Shri N.K. Billaiya & Shri Anubhav Sharma

For Appellant: Shri Ajay Vohra, AdvFor Respondent: Shri T. James Singson, CIT- DR
Section 143(3)Section 263Section 56(2)Section 56(2)(viib)

shares was made at the issue price of Rs. 99.72 i.e. face value of Rs. 10/- and share premium of Rs. 89.72. The Fair Market Value of the shares for the purpose of section 56(2)(viib) of the Act r.w.r. 11UA of the Income Tax Rules, 1962 was carried ... authorities. It is the say of the ld. counsel for the assessee that the NAV applied by the Assessing Officer for determining the Fair Market Value is full of mathematical errors and if those mathematical errors are corrected, there would be no difference between the value adopted by the assessee

Madhurittu Puri, United Kingdom vs. DCIT, Circle International Taxation 2(2)(2), New Delhi

In the result, the appeal of the assessee is allowed

ITA 3063/DEL/2022[2019-20]Status: DisposedITAT Delhi18 Jul 2023AY 2019-20

Bench: Shri G.S. Pannu, Hon’Ble & Ms. Astha Chandraasstt. Year: 2019-20

For Appellant: Shri Sanjiv Sapra, FCAFor Respondent: Shri Vizay Vasanta, CIT- DR
Section 142ASection 143(3)Section 144Section 234DSection 270A(2)

following: a) Reference as made by the AO under section 142A of the Act to Department’s Valuation Officer ( DVO ) for determining fair market value (‘FMV’) of house property as on 01/04/2001 was unlawful and invalid. b) Both the independent registered valuer’s reports as relied upon and furnished ... house property. 3. That on the facts and circumstances of the case and in law the AO/DRP has erred in not accepting the fair market value as on 01/04/2001 of the inherited house property as declared at Rs.3,50,00,000 (1/3rd share of Appellant at Rs.1

Extol Wind Ltd, Bhopal vs. The ITO Ward 1 (3), Bhopal

In the result, appeal of assessee is allowed for statistical purposes

ITA 30/IND/2023[2014-15]Status: DisposedITAT Indore14 Jul 2023AY 2014-15

Bench: Shri Vijay Pal Rao & Shri B.M. Biyaniextol Wind Ltd. Ito Ward 1(3) 104, Jahangirbad Barkhedi Bhopal Vs. Road, Bhopal (Appellant / Assessee) (Respondent/ Revenue) Pan: Aaace 8607 N Assessee By Shri Pawan Ved, Ar Revenue By Shri Ashish Porwal, Sr. Dr Date Of Hearing 11.07.2023 Date Of Pronouncement 14.07.2023

Section 56(2)(viib)

exceeds face value of such shares, therefore, the AO asked the assessee to furnish the explanation in this regard and give calculation of fair market value of per share. The assesse submitted the calculation vide reply dated 23.12.2016. After considering the reply of the assesse the AO adopted the fair ... against issue price of Rs.80 per share and consequently made the addition of Rs.16,33,995/- being difference between the issue price and fair market value of the shares issued by the assesse u/s 56(2)(viib). The assesse challenged the action of the AO before

Shri. Bhupendra Sitapchand Zaveri, Mumbai vs. ITO, It, Ward- 4(3)(1), Mumbai

In the result, the present appeal preferred by the Assessee is 10

ITA 2052/MUM/2022[2018-19]Status: DisposedITAT Mumbai13 Jul 2023AY 2018-19
For Appellant: Shri. Ketan VajaniFor Respondent: Shri. Anil Sant
Section 143(3)Section 144C(13)Section 144C(5)Section 50C

Appellant which has been placed on record as part of the paper-book. As per the aforesaid report, the DVO has determined the fair market value of capital asset at INR 4,00,32,000/-. We note that the DRP had rejected the contention of the 5. Appellant that ... exceeds 110% of the sale consideration of INR 3,96,00,000/- disclosed by the Appellant. However, since the DVO has determine the fair market value of the capital asset at INR 4,00,32,000/-, the assessing officer is directed to re-compute LTCG by taking the same

DCIT, Circle- 21(1), New Delhi vs. Religare Finvest Ltd., New Delhi

In the result, -Appeal in ITA No

ITA 7553/DEL/2018[2015-16]Status: DisposedITAT Delhi13 Jul 2023AY 2015-16

Bench: Dr. B. R. R. Kumar & Shri Yogesh Kumar U.S.

Section 14A

after 5 years (refer Clause 4.6 of the agreement). -Pertinently, the CCD's shall be converted at conversion rate which was defined as fair market value of shares on the conversion date (refer Clause 4.7 of the agreement). -CCDs' holder (REL) is entitled to interest @ 10.90% p.a. w.e.f. date

Religare Finvest Ltd., New Delhi vs. DCIT, Circle- 21(1), New Delhi

In the result, -Appeal in ITA No

ITA 6116/DEL/2018[2015-16]Status: DisposedITAT Delhi13 Jul 2023AY 2015-16

Bench: Dr. B. R. R. Kumar & Shri Yogesh Kumar U.S.

Section 14A

after 5 years (refer Clause 4.6 of the agreement). -Pertinently, the CCD's shall be converted at conversion rate which was defined as fair market value of shares on the conversion date (refer Clause 4.7 of the agreement). -CCDs' holder (REL) is entitled to interest @ 10.90% p.a. w.e.f. date

Religare Finvest Ltd., New Delhi vs. DCIT, Circle- 21(1), New Delhi

In the result, -Appeal in ITA No

ITA 547/DEL/2018[2013-14]Status: DisposedITAT Delhi13 Jul 2023AY 2013-14

Bench: Dr. B. R. R. Kumar & Shri Yogesh Kumar U.S.

Section 14A

after 5 years (refer Clause 4.6 of the agreement). -Pertinently, the CCD's shall be converted at conversion rate which was defined as fair market value of shares on the conversion date (refer Clause 4.7 of the agreement). -CCDs' holder (REL) is entitled to interest @ 10.90% p.a. w.e.f. date

ACIT (OSD), Circle- 21(1), New Delhi vs. Religare Finvest Ltd., New Delhi

In the result, -Appeal in ITA No

ITA 133/DEL/2018[2014-15]Status: DisposedITAT Delhi13 Jul 2023AY 2014-15

Bench: Dr. B. R. R. Kumar & Shri Yogesh Kumar U.S.

Section 14A

after 5 years (refer Clause 4.6 of the agreement). -Pertinently, the CCD's shall be converted at conversion rate which was defined as fair market value of shares on the conversion date (refer Clause 4.7 of the agreement). -CCDs' holder (REL) is entitled to interest @ 10.90% p.a. w.e.f. date

Religare Finvest Ltd., New Delhi vs. ACIT, Circle- 21(1), New Delhi

In the result, -Appeal in ITA No

ITA 7856/DEL/2017[2014-15]Status: DisposedITAT Delhi13 Jul 2023AY 2014-15

Bench: Dr. B. R. R. Kumar & Shri Yogesh Kumar U.S.

Section 14A

after 5 years (refer Clause 4.6 of the agreement). -Pertinently, the CCD's shall be converted at conversion rate which was defined as fair market value of shares on the conversion date (refer Clause 4.7 of the agreement). -CCDs' holder (REL) is entitled to interest @ 10.90% p.a. w.e.f. date

ACIT, Circle- 21(1), New Delhi vs. Religare Finvest Ltd., New Delhi

In the result, -Appeal in ITA No

ITA 5202/DEL/2017[2012-13]Status: DisposedITAT Delhi13 Jul 2023AY 2012-13

Bench: Dr. B. R. R. Kumar & Shri Yogesh Kumar U.S.

Section 14A

after 5 years (refer Clause 4.6 of the agreement). -Pertinently, the CCD's shall be converted at conversion rate which was defined as fair market value of shares on the conversion date (refer Clause 4.7 of the agreement). -CCDs' holder (REL) is entitled to interest @ 10.90% p.a. w.e.f. date

Religare Finvest Ltd., New Delhi vs. DCIT, Circle- 21(1), New Delhi

In the result, -Appeal in ITA No

ITA 4796/DEL/2017[2012-13]Status: PendingITAT Delhi13 Jul 2023AY 2012-13

Bench: Dr. B. R. R. Kumar & Shri Yogesh Kumar U.S.

Section 14A

after 5 years (refer Clause 4.6 of the agreement). -Pertinently, the CCD's shall be converted at conversion rate which was defined as fair market value of shares on the conversion date (refer Clause 4.7 of the agreement). -CCDs' holder (REL) is entitled to interest @ 10.90% p.a. w.e.f. date

Hri Healthcare Pvt Ltd., Mumbai vs. Asst. CIT Circle-10(1)(1), Mumbai

In the result, the appeal of the assessee is allowed

ITA 2437/MUM/2019[2015-16]Status: DisposedITAT Mumbai11 Jul 2023AY 2015-16

Bench: Shri Aby T Varkey & Shri Amarjit Singhhri Healthcare Pvt. Ltd. Vs. Asst. Commissioner Of 602, 6Th Floor, Supreme Income Tax, Circle Chambers, Off Veera 10(1)(1), Aaykar Bhavan, Desai Road, Andheri (W) 2Nd Floor, Mumbai – 400053 Mumbai - 400021 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aacch7613M Appellant .. Respondent [ Appellant By : K. Gopal Respondent By : Soumendu Kumar Dash Date Of Hearing 16.06.2023 Date Of Pronouncement 11.07.2023 आदेश / O R D E R Per Amarjit Singh (Am): This Appeal Filed By The Assesse Is Directed Against The Order Passed By The Cit(A)-17, Mumbai, Dated 28.01.2019 For A.Y. 2015-16. The Assessee Has Raised The Following Grounds Before Us: “1.1 The Learned Assessing Officer Erred In Making An Addition Of Rs.4,96,08,000 Under Section 56(2)(Viib) Of The Income-Tax Act, 1961 ("The Act') Being The Difference Between The Share Premium Received By The Appellant From Its Holding Company & The Fair Market Value Of The Shares There Of As Computed Under Rule 11Ua Of The Income-Tax Rules, 1962( The Rules") & Cit(A) In Confirming The Same 1.2 The Assessing Officer Erred In Holding The Issue Price Of Right Shares To Existing Shareholder Of The Company Which Were Adopted On The Basis Of A Valuation Report Of An Independent Valuer As Exorbitant On Reasons Purely In The Realm Of Conjectures/Surmises Without Appreciating That The Same Is In Accordance With Provisions Of The Act & Cit(A) In Confirming The Same. 1.3 It Is Submitted That Valuation Is An Art & Not A Science. The Valuation Are Based On Certain Assumptions & Estimations Especially In Case Of New Company. The Valuation Has Been Done Based On The Dcf Method

For Appellant: K. GopalFor Respondent: Soumendu Kumar Dash
Section 143(2)Section 56(2)(viib)

Income-tax Act, 1961 ("the Act') being the difference between the share premium received by the appellant from its Holding Company and the fair market value of the shares there of as computed under Rule 11UA of the Income-tax Rules, 1962( the rules") and CIT(A) in confirming ... that the value of the share was estimated unrealistically at higher value by the valuer without carrying out any verification for arriving at fair market value of the equity share of the assessee company. The assessing officer of the view that fair P a g e | 3 HRI Healthcare

Rajasthan Transmat Private Limited, Jaipur vs. Income Tax Officer, Ward 7(2), Jaipur

In the result, the appeal of the assessee partly allowed

ITA 165/JPR/2023[2012-13]Status: DisposedITAT Jaipur11 Jul 2023AY 2012-13

Bench: SHRI SANDEEP GOSAIN (Judicial Member), DR MEETHA LAL MEENA (Accountant Member)

For Appellant: Mrs. Prabha Rana, AR and Shri Vinod Kumar, AdvocateFor Respondent: Mrs. Runi Pal, Addl. CIT-DR
Section 133(6)Section 142(1)Section 143(2)

assessee is engaged in the business of manufacturing and transmission line and hardware and profit making company. While issuing shares, business potential, fair market value of the assets has to be taken into account and the person paying the premium has factually benefited from the purchase of shares at premium ... Assessee had, during the course of assessment, given the fair market value of the investment held which proves the reasonableness of the premium. The securities, when sold, will result in huge profit by reason of value of investment at cost price. 9 RAJASTHAN TRANSMAT PVT LTD. VS ITO, WARD

Joint Commissioner of Income Tax (OSD) Circle-3, Ferozepur vs. Measage Om Sons Marketing Private Limited, Faridkot

In the result, the appeal of the revenue bearing ITA No

ITA 407/ASR/2019[2015-16]Status: DisposedITAT Amritsar07 Jul 2023AY 2015-16

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjee

Section 143(3)Section 250(6)Section 37(1)Section 56(2)(viib)

without giving any valid base. 3.1. The ld. AO opted the different method of calculation of share in the Fair Market Value (in brevity the FMV)and calculated value per share @ Rs. 103.90 per share i.e., Rs. 10/- face value and premium of Rs. 93.90/-. The addition was thus made ... appellant that in case effect of the goodwill as well as appreciation of land value is also adequately taken into consideration, the fair market value per share would touch almost Rs. 190/- much higher than the transacted value of Rs, 147.8/-. In view of the discussion above, the Assessing Officer

Shushilaben Pratapbhai Thakor, Na vs. Arivs.Income Tax Officer, Ward - 5, Navsari

In the result, the grounds of appeal raised by the assessee is allowed for statistical purpose

ITA 259/SRT/2023[2012-13]Status: DisposedITAT Surat07 Jul 2023AY 2012-13

Bench: Shri Pawan Singh & Dr Arjun Lal Sainiआ.अ.सं./Ita No.259/Ahd/2023 (A.Y. 2012-13) (Hearing In Physical Court) Shushilaben Pratapbhai Thakor Income Tax Officer, 6, Shiv Jal, Shailesh Park Ward-5, Navsari, Room Vs Society, Gandevi Road, Navsari- No.204, 2Nd Floor, Aayakar 396445 Bhawan, Near Char Pool, Pan : Adept 7623 H Police Choki, Navsari- 396445 अपीलाथ"/Appellant ""यथ" /Respondent

Section 143(3)Section 234ASection 234BSection 234CSection 234DSection 249(2)Section 254(1)Section 54B

Deductions from capital gains without prejudice to the above. (a) The Assessing Officer was required to grant deduction of indexed value of fair market value as on 01.04.1981. (b) The Assessing Officer ought to have given deduction for payment made to relatives who had overriding charge on the land sold

ITO Ward - 25(4), New Delhi vs. Triumph Reality Pvt Ltd, New Delhi

In the result, appeal is dismissed

ITA 1412/DEL/2020[2014-15]Status: DisposedITAT Delhi06 Jul 2023AY 2014-15

Bench: Shri Saktijit Dey, Vice- & Shri Girish Agrawalassessment Year: 2014-15 Income-Tax Officer, Versus Triumph Reality Pvt. Ltd. Ward 25(4), New Delhi. Plot No. 2, Vasant Kunj, Phase-Ii, Nelson Mandela Road, New Delhi. Pan: Aacct8092L (Appellant) (Respondent) Assessee By : Ms. Kavita Jha, Advocate & Sh. Himanshu Agarwal, Adv. Revenue By : Ms. Sapna Bhatia, Cit- Dr

For Appellant: Ms. Kavita Jha, Advocate &For Respondent: Ms. Sapna Bhatia, CIT- DR
Section 56

Rs.45,97,44,964/- as share premium. Noticing this fact, the Assessing Officer called upon the assessee to provide basis of valuation of fair market value (FMV) of shares. Alleging that the assessee failed to provide FMV of shares, the Assessing Officer added back the amount of Rs.45