INDIA CONVENTION AND CULTURE CENTRE PVT. LTD., NEW DELHI V. ITO, WARD- 12(2), NEW DELHI

ITA 7262/DEL/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9665 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 05-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS NAINA SOIN KAPIL
• Keywords: Opportunity of being heard; Additional evidence; Fair market value; Competent authority; Set aside
• Section: 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : C : NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO.7262/DEL/2017 ASSESSMENT YEAR: 2014-15 M/S INDIA CONVENTION AND CULTURE CENTRE PVT. LTD., HOUSE NO.4, ROAD NO.71, PUNJABI BAGH WEST, DELHI 110 026. PAN: AAECG2115M VS ITO, WARD-12(2), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VED JAIN, ADVOCATE & SHRI RISHABH JAIN, CA REVENUE BY : MRS. NAINA SOIN KAPIL, SR. DR DATE OF HEARING : 04.07.2019 DATE OF PRONOUNCEMENT : 27.09.2019 ORDER PER R.K. PANDA, AM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 1 ST NOVEMBER, 2017 OF THE CIT(A)-4, NEW DELHI RELATING TO ASSESSMENT YEAR 2014-15. [[[[ 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A COMPANY AND FILED ITS RETURN OF INCOME ON 29 TH SEPTEMBER, 2014, DECLARING THE LOSS OF RS.3,56,772 /-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSING OFFICER NOTED THAT THE ITA NO.7262/DEL/2017 2 ASSESSEE COMPANY HAS ALLOTTED 70 LAC EQUITY SHARES OF RS.10 EACH AT A PREMIUM OF RS.5 PER SHARE TO THE FOLLOWING COMPANIES:- NAME OF SHAREHOLDER NO. OF SHARES ISSUED M/S RAPTURE SOFTWARE PVT. LTD. 2,50,000 EQUITY SHAR ES OF RS.10 EACH ISSUED AT PREMIUM OF RS.5/- PER SHARE. RS.5/- PER SHARE PAID AS SHARE APPLICATION MONEY AND RS.5/- PER SHARE PAID AS PREMIUM M/S MOTIVE EQUITY PVT. LTD. 50,00,000 EQUITY SHARES OF RS.10 EACH ISSUED AT PREMIUM OF RS.5/- PER SHARE. RS.5/- PER SHARE PAID AS SHARE APPLICATION MONEY AND RS.5/- PER SHARE PAID AS PREMIUM M/S COMPLETE EQUITY PVT. LTD. 15,00,000 EQUITY SHAR ES OF RS.10 EACH ISSUED AT PREMIUM OF RS.5/- PER SHARE APPLICATION MONEY AND RS.5/- PER SHARE PAID AS PREMIUM. M/S GLAXO BUILDCON PVT. LTD. 2,50,000 EQUITY SHARES OF RS.10 EACH ISSUED AT PREMIUM OF RS.5/- PER SHARE. RS.5/- PER SHARE PAID AS SHARE APPLICATION MONEY AND RS.5/- PER SHARE PAID AS PREMIUM 3. HE NOTICED THAT THE ASSESSEE COMPANY HAS RECEIVE D PREMIUM ON ISSUE OF SHARES TO THE TUNE OF RS.3.5 CRORES. HE, THEREFORE , ASKED THE ASSESSEE TO JUSTIFY THE PREMIUM RECEIVED OVER AND ABOVE THE FAIR MARKET VAL UE OF THE SHARES, WITH DOCUMENTARY EVIDENCE IN TERMS OF SECTION 56(2)(VIIB ) OF THE IT ACT. ON THE BASIS OF VARIOUS DETAILS FILED IN THE BALANCE SHEET, THE ASSESSING OFFICER DETERMINED THE PAID UP VALUE OF EQUITY SHARES OF RS.10/- EACH AT R S.6.65 CRORES WHICH IS AS UNDER:- TOTAL ASSETS TOTAL LIABILITY/TOTAL PAID UP VALU E OF THE SHARE 47,57,29,526 40,85,69,537/1,01,00,000 = 6.65 TOTAL PAID UP VALUE OF EQUITY SHARES OF RS.10/- CO MES TO RS.6.65. ITA NO.7262/DEL/2017 3 4. HE, THEREFORE, ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE EXCESS AMOUNT OF PREMIUM OVER AND ABOVE THE VALUE OF THE VALUE PER S HARE SHOULD NOT BE DISALLOWED AND ADDED BACK TO ITS INCOME. IN ABSENCE OF ANY RE PLY FROM THE SIDE OF THE ASSESSEE TO JUSTIFY SUCH PREMIUM AND CONSIDERING THE FACT TH AT IT IS A TIME BARRING CASE WHERE THE PROCEEDINGS ARE GOING TO BE BARRED BY TIME LIMI TATION, THE ASSESSING OFFICER DETERMINED THE EXCESS VALUE OF SUCH PREMIUM RECEIVE D OVER AND ABOVE THE FAIR MARKET VALUE OF SHARES AT RS.3,50,00,000/- UNDER TH E PROVISIONS OF SECTION 56(2)(VIIB) OF THE IT ACT AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 5. BEFORE THE CIT(A), THE ASSESSEE FILED CERTAIN AD DITIONAL EVIDENCES AND SUBMITTED THAT IN VIEW OF RULE 11UA OF THE INCOME T AX RULES, 1962, THE VALUE SHOULD BE RS.66.50 PER SHARE INSTEAD OF RS.6.50 PER SHARE COMPUTED BY THE ASSESSING OFFICER. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE, THE LD.CIT(A) HELD THAT THE CORRECT FAIR MARKET VALUE P ER SHARE COMES TO RS.10.05 AS AGAINST RS.6.50 COMPUTED BY THE ASSESSING OFFICER A ND, ACCORDINGLY, RESTRICTED THE DISALLOWANCE TO RS.3,46,50,000/- BY OBSERVING AS UN DER:- 6.6 I HAVE CONSIDERED THE SUBMISSIONS OF THE APPE LLANT AND THE ORDER OF THE AO. THE APPELLANT HAS TAKEN THAT IN VIEW OF RUL E 11UA OF THE INCOME TAX RULES, 1962, THE AO ERRED IN COMPUTING THE FAIR MARKET VALUE OF THE EQUITY SHARES OF THE APPELLANT COMPANY. THE APPELLA NT SUBMITTED THAT THE VALUE SHOULD BE RS. 66.50 PER SHARE INSTEAD OF RS. 6.50 P ER SHARE COMPUTED BY THE AO. 6.7 I HAVE CONSIDERED RULE 11UA OF THE RULES, THE CALCULATION MADE BY THE AO AND THE SUBMISSIONS OF THE APPELLANT. IN VIE W OF THE SAME, I FIND THAT THE AO HAS ERRED IN COMPUTING THE FAIR MARKET VALUE OF THE EQUITY SHARES OF COMPANY. HOWEVER, AT THE SAME TIME THE SUBMISSION O F THE APPELLANT THAT THE VALUE OF EACH EQUITY SHARE IS RS. 66.50 IS ALSO NOT CORRECT. THE LD. AO AND THE APPELLANT, BOTH ERRED IN NOT CONSIDERING THE VALUE OF SHARE APPLICATION MONEY ITA NO.7262/DEL/2017 4 OUTSTANDING, IN THE CALCULATION OF LIABILITY FOR TH E PURPOSE OF COMPUTATION OF FAIR MARKET VALUE, AS PER RULE 11UA OF THE RULES. T HE CORRECT COMPUTATION IS EXPLAINED BELOW: 6.8 ACCORDING TO RULE 11UA OF THE RULES, THE FAIR MARKET VALUE OF THE EQUITY SHARES OF THE COMPANY WOULD BE AS UNDER: ASSETS = RS. 47,57,29,528/- LIABILITIES = RS. 46,55,69,538/- (I.E. TOTAL LI ABILITIES - PAID UP CAPITAL - RESERVE AND SURPLUS) HERE, THE AO ERRED IN CALCULATING THE VALUE OF LIAB ILITIES, THE AO ERRED IN NOT INCLUDING THE AMOUNT OF SHARE APPLICATION MONEY IN LIABILITIES. AS PER RULE 11UA, PAID UP CAPITAL AND RESERVE AND SURPLUS HAVE TO BE DEDUCTED FROM THE TOTAL LIABILITIES. SHARE APPLICATION MONEY IS NOT P AID UP CAPITAL, IT IS A LIABILITY TILL THE TIME THE SHARES ARE NOT ALLOTTED. PE = RS.1,01,00,000 PV = RS. 10/- PER SHARE FAIR MARKET VALUE = (A-L)/PE*PV = RS. 10.05 FMV = 47,57,29,526 - (40,83,58,301 + 11,236 + 5,7 0,00,000) X 10 / 1,01,00,000 = RS 10.05 THUS, THE CORRECT FMV PER SHARE, IN THIS CASE COM ES TO RS 10.05/-. 6.9 I HAVE ALSO CONSIDERED THE SUBMISSION OF THE AP PELLANT WITH REGARD TO THE FACT THAT THE COMPANY HAS RECEIVED PERMISSION O F CHANGE IN 'LAND USE' OF THEIR LAND HOLDING, THUS HAVING A COMMERCIAL RIGHT FOR SETTING UP AN INSTITUTION FOR ART, CULTURE AND CONVENTION. HOWEVER, THE APPEL LANT HAS NOT AT ALL EXPLAINED HOW THE SAME WOULD INCREASE THE FAIR VALU E OF THE SHARES OF THE COMPANY AND/OR THE QUANTUM OF SUCH RIGHT ON THE VAL UE OF THE EQUITY SHARES. FURTHER, ACCORDING TO THE CERTIFICATE OF THE CHANGE S OF LAND USE PERMISSION, RECEIVED FROM DIRECTORATE OF TOWN & COUNTRY PLANNIN G, HARYANA, THE COMPANY HAS ALREADY PAID SOME AMOUNT FOR SUCH CONVE RSION IN LAND USE, WHICH MUST BE DEBITED IN THE ASSETS OF THE COMPANY, THEREBY INCREASING THE VALUE OF THEIR ASSETS. THUS, IN THE ABSENCE OF ANY EXPLANATION BY THE ASSE SSEE REGARDING THE QUANTUM OF EFFECT OF SUCH COMMERCIAL RIGHT OVER THE VALUE O F EQUITY SHARES OF THE COMPANY, THE SAME CANNOT BE CONSIDERED, AND ACCEPTE D. FURTHER, I HAVE ALSO CONSIDERED THE CASE LAWS RELIE D UPON BY THE APPELLANT. THE CASE LAWS RELIED UPON BY THE APPELLANT DO NOT RELAT E TO THE FACTS OF THE CASE. 6.10 IN VIEW OF THE FAIR MARKET VALUE OF THE EQUITY SHARES AS COMPUTED ABOVE AND THE CONSIDERATION/ PRICE AT WHICH THE SHA RES ARE ISSUED, THE COMPANY ITA NO.7262/DEL/2017 5 HAS RECEIVED AN EXCESS CONSIDERATION OF RS. 4.95 PE R EQUITY SHARES, OVER AND ABOVE THE FAIR MARKET VALUE OF THE EQUITY SHARE I.E . (RS. 15 - RS. 10.05). THUS, THE TOTAL AMOUNT THAT SHOULD HAVE BEEN ADDED TO THE INCOME OF THE APPELLANT UNDER SECTION 56(2)(VIIB) OF THE ACT IS R S. 4.95 X 70,00,000 EQUITY SHARES = RS. 3,46,50,000/-. ACCORDINGLY, THE ADDITI ON U/S 56(2)(VIIB) IS REDUCED TO RS.3,46,50,000/- FROM RS.3,50,00,000/-. THE APPE LLANT GETS A RELIEF OF RS.3,50,000/- ONLY. ADDITION OF RS.3,46,50,000/- IS CONFIRMED. 6. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASS ESSEE IS IN APPEAL BEFORE THE TRIBUNAL RAISING THE FOLLOWING GROUNDS:- AGAINST CIT (A) ORDER UNDER SECTION 250 OF THE INC OME TAX ACT, 1961 GROUND NO. 1 THE LEARNED CIT (A) ERRED IN PASSING THE EX PARTE O RDER WITHOUT GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE APPELL ANT. GROUND NO. 2 THAT THE LEARNED CIT (A) ERRED IN TAKING SHARE APPL ICATION MONEY AS LIABILITY IN CALCULATING FAIR MARKET VALUE AS PER S ECTION 11UA OF INCOME TAX ACT. GROUND NO. 3 THE HON'BLE CIT APPEALS PASSED THE ORDER WITHOUT RE MANDING THE MATTER TO ASSESSING OFFICER FOR CALCULATING THE FMV OF SHARES UNDER SECTION 56(2)(VIIB) READ WITH 11UA WHILE CONSIDERING THE SH ARE APPLICATION AS LIABILITY OF THE COMPANY WHICH WAS CONSIDERED AS SH AREHOLDERS FUND BY THE ASSESSING OFFICER. GROUND NO. 4 THE HON'BLE CIT APPEALS PASSED THE ORDER WITHOUT CO NSIDERING THE FMV OF LAND OWNED BY THE COMPANY AS ON THE DATE OF ISSUING THE SHARES FOR CALCULATING THE VALUE OF SHARES AS PER SECTION 56(2 )(VIIB). GROUND NO. 5 THAT THE ASSESSEE CRAVES ITS PLEA TO ADD ANY OTHER GROUND THAT MAY ARISE DURING THE TIME OF APPEAL PROCEEDING. ITA NO.7262/DEL/2017 6 PRAYER UNDER THE CIRCUMSTANCES SUBMITTED ABOVE IT IS RESPE CTFULLY PRAYED THAT THE APPEAL MAY KINDLY BE ALLOWED. PETITION UNDER RULE 4 6 (A) OF THE INCOME TAX RULES, 1968-ADMITTANCE OF ADDITIONAL EVIDENCES SINCE, FEW OF THE DOCUMENTS COULD NOT BE FILED BECAUSE OF VARIOUS REA SONS LIKE LACK OF CLARITY OF DOCUMENTS OF THE ASSESSEE AS WELL AS AUTHORIZED REPRESENTATIVE. . 7. THE LD. COUNSEL FOR THE ASSESSEE, REFERRING TO P AGE 14 OF THE PAPER BOOK, DREW THE ATTENTION OF THE BENCH TO THE ASSET SIDE OF THE BALANCE SHEET AND SUBMITTED THAT THE TANGIBLE ASSETS SHOWN IN THE BALANCE SHEET ARE TO THE TUNE OF RS.56,44,80,642/-. REFERRING TO PAGE 19 OF THE PAPER BOOK, HE SUBMITTE D THAT THE LAND AT GURGAON HAS BEEN SHOWN AT RS.56,45,80,642/- AS AT 31 ST MARCH, 2014. REFERRING TO PAGE 25 OF THE PAPER BOOK, HE SUBMITTED THAT THE DIRECTOR OF T OWN & COUNTRY PLANNING, HARYANA, VIDE LETTER DATED 12 TH OCTOBER, 2011 HAD GRANTED CHANGE OF LAND USE ON THE BASIS OF APPLICATION OF THE ASSESSEE DATED 2 ND MAY, 2011 AND 11 TH AUGUST, 2011 WHEREIN THEY HAVE PERMITTED THE ASSESSEE FOR SETTIN G UP AN INSTITUTION FOR ART, CULTURE AND CONVENTION CENTRE OVER AN AREA MEASURIN G 18,011.85 SQ. MTR. REFERRING TO PAGE 27 OF THE PAPER BOOK, HE SUBMITTED THAT THE DIRECTOR OF TOWN AND COUNTRY PLANNING, HARYANA, VIDE LETTER DATE 14 TH JUNE, 2012 HAD GRANTED CHANGE OF LAND USE PERMISSION FOR SETTING UP AN INSTITUTION FOR ART, C ULTURE AND CONVENTION CENTRE OVER AN ADDITIONAL AREA OF 24937.45 SQ. MTR., SITUATED I N THE REVENUE ESTATE OF VILLAGE MAIDAWAS. HE SUBMITTED THAT THE ASSESSEE HAD PAID AN AMOUNT OF RS.31,42,119/- TOWARDS CONVERSION CHARGE AND RS.48,19,448/- ON ACC OUNT OF 10% OF THE TOTAL EXTERNAL DEVELOPMENT CHARGES. REFERRING TO PAGE 10 7 OF THE PAPER BOOK, HE SUBMITTED THAT THE CIRCLE RATE OF THE LAND W.E.F. 0 1.04.2011 HAS GONE UP TO ITA NO.7262/DEL/2017 7 RS.22,000/- PER SQ. YARD. HE SUBMITTED THAT IF THE SAME IS CONSIDERED, THE TOTAL COST OF LAND COMES TO RS.113 CRORES AND, THEREFORE, THE VALUE PER SHARE COMES TO RS.658.33, THE DETAILS OF WHICH ARE AS UNDER:- PARTICULARS AMOUNT TOTAL ASSETS (CONSIDERING FMV OF LAND WHICH WAS CONVERTED FROM AGRICULTURAL TO INSTITUTION (REFER N OTE 1) OTHER ASSETS TOTAL ASSETS TOTAL LIABILITIES NET ASSETS NO. OF EQUITY SHARES 1,130,072,749 917,608 1,130,990,357 465,569,537 665,420,820 1,010,000 VALUE OF SHARES 658.83 8. HE SUBMITTED THAT AS AGAINST THE FAIR MARKET VAL UE OF SHARES AT RS.658.83 PER SHARE, THE ASSESSEE HAS ISSUED THE SHARES AT A PREM IUM OF RS.5 ONLY. THEREFORE, NO ADDITION U/S 56(2)(VIIB) IS CALLED FOR. REFERRING TO THE DECISION OF THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF INDIA TODAY ONLINE P VT. LTD., VIDE ITA NO.6453 AND 6454/DEL/2018, ORDER DATED 15 TH MARCH, 2019, HE SUBMITTED THAT THE TRIBUNAL IN THE SAID DECISION HAS HELD THAT VALUATION OF THE SHARES HAS TO TAKE INTO CONSIDERATION VARIOUS FACTORS AND NOT SIMPLY ON THE BASIS OF FINA NCIALS. IT HAS BEEN HELD THAT SUBSTANTIATION OF THE FAIR MARKET VALUE OF THE SHAR ES HAS TO BE FIRST DECIDED ON THE BASIS OF THE VALUATION DONE BY THE ASSESSEE AND IT CANNOT BE DECIDED FROM THE LENS OF SECTION 11UA WHICH CAN BE APPLIED IN CASE SUB-CL AUSE (I) HAS BEEN EXERCISED. IT HAS BEEN HELD THAT FMV CAN BE DETERMINED IN EITHER OF THE TWO MANNERS WHICHEVER IS HIGHER SO AS TO DEMONSTRATE THAT THE VALUE OF SH ARES DOES NOT EXCEED THE FAIR MARKET VALUE AND THEN THE ASSESSING OFFICER CANNOT INSIST UPON TO FOLLOW ONLY ONE ITA NO.7262/DEL/2017 8 PARTICULAR METHOD. HE ALSO RELIED ON THE DECISION OF THE JAIPUR BENCH OF THE TRIBUNAL IN THE CASE OF SAHU MINERALS AND PROPERTIE S LTD. IN ITA NO.895/JP/2017, ORDER DATED 07.01.2019. 9. THE LD. DR, ON THE OTHER HAND, HEAVILY RELIED ON THE ORDERS OF THE ASSESSING OFFICER AND CIT(A). 10. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND THE ASSESSEE, IN THE INSTANT CASE, HAS ALLOTTED 70 LAC EQUITY SHARES OF RS.10 EACH AT A PREMIUM OF RS.5 PER SHARE AND HAS RECEIVED PREMIUM OF RS.3.5 CRORES. WE FIND THE ASSESSING OFFICER, INVOKING THE PROVISIONS OF S ECTION 56(2)(VIIB), MADE ADDITION OF RS.3,50,00,000/- ON THE GROUND THAT THE FAIR MARKET VALUE OF SHARES COMES TO RS.6.65 PER SHARE AS PER THE BOOK VALUE. WE FIND THE LD.CIT(A) COMPUTED THE FAIR MARKET VALUE OF THE SHARES AT RS. 10.05 PER SHARE AND GAVE PART RELIEF OF RS.3,50,000/- AND SUSTAINED THE ADDITION OF RS.3,46,50,000/- THE REASONS FOR WHICH HAS BEEN REPRODUCED IN THE PRECEDING PARA GRAPHS. IT IS THE SUBMISSION OF THE LD. COUNSEL THAT THE LOWER AUTHORITIES HAVE WRO NGLY COMPUTED THE FAIR MARKET VALUE OF THE SHARES ON THE BASIS OF THE BOOK VALUE IGNORING THE FMV OF THE LAND HELD BY THE COMPANY. IT IS THE SUBMISSION OF THE L D. COUNSEL FOR THE ASSESSEE THAT THE VALUE OF ITS SHARES IN TERMS OF CLAUSE (II) OF EXPLANATION (A) OF SECTION 56(2)(VIIB) ON THE BASIS OF THE VALUE OF ITS LAND A T MARKET VALUE WHICH IS RS.113 ITA NO.7262/DEL/2017 9 CRORES COMES TO RS.658.83 PER SHARE. THEREFORE, IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT INSTEAD OF TAKING THE BOOK VALUE OF THE PROPERTY AT RS.47.81 CRORE AS PER THE BALANCE SHEET, THE LOWER AUTHORITIES SHOULD HAVE TAKEN THE FAIR MARKET VALUE OF LAND WHICH WAS CONVERTED FROM AGRICULTURAL TO INSTITUTIONAL AT RS.113,00,72,749/- AND OTHER ASSETS OF RS.9,17,608/ -. THUS, ACCORDING TO HIM, THE FAIR MARKET VALUE OF THE SHARES COMES TO RS.658.83 PER SHARE. 11. WE FIND SOME FORCE IN THE ABOVE ARGUMENT OF THE LD. COUNSEL FOR THE ASSESSEE. THE EXPLANATION TO PROVISIONS OF SECTION 56(2)(VIIB) READS AS UNDER:- EXPLANATION. FOR THE PURPOSES OF THIS CLAUSE, (A) THE FAIR MARKET VALUE OF THE SHARES SHALL BE THE VA LUE ( I ) AS MAY BE DETERMINED IN ACCORDANCE WITH SUCH MET HOD AS MAY BE PRESCRIBED; OR ( II ) AS MAY BE SUBSTANTIATED BY THE COMPANY TO THE SAT ISFACTION OF THE ASSESSING OFFICER, BASED ON THE VALUE, ON THE DATE OF ISSUE OF SHARES, OF ITS ASSETS, INCLUDING INTANGIBLE ASSETS BEING GOODWILL, KNOW-HOW, PATENTS, COPYRIGHTS, TRADEMARKS, LICENCES, FRANCHISES OR ANY OTHER BUSINESS OR COMMERCIAL RIGHTS OF SIMILAR NATURE, WHICHEVER IS HIGHER; 12. FROM THE VARIOUS DETAILS FURNISHED BY THE ASSES SEE, WE FIND THE ASSESSEE HAD OBTAINED PERMISSION OF THE COMPETENT AUTHORITY FOR CHANGE OF LAND USE FROM AGRICULTURAL TO INSTITUTIONAL FOR ART, CULTURE AND CONVENTION CENTRE FOR A TOTAL AREA OF 42949 SQ. MTRS OR 51366.94 SQ. YARDS. A PERUSAL OF THE CIRCLE RATE FOR SUCH INSTITUTIONAL AREA SHOWS THAT THE CIRCLE RATE HAS B EEN PRESCRIBED AT RS.22,000/- PER SQ. YARD. THUS, AS PER THE CIRCLE RATE PRESCRIBED BY THE COMPETENT AUTHORITY, THE ITA NO.7262/DEL/2017 10 VALUE OF TOTAL ASSETS I.E., THE FAIR MARKET VALUE O F THE LAND WHICH WAS CONVERTED FROM AGRICULTURAL INTO INSTITUTIONAL COMES TO R S.113,00,72,749/-. IF THE OTHER ASSETS OF RS.9,17,608/- IS ADDED TO SUCH ASSET AND THE TOTAL LIABILITY OF 46,55,69,537/- IS DEDUCTED, THEN, THE NET ASSET COM ES TO RS.665,420,820/-. IF THE SAME IS DIVIDED BY THE NUMBER OF EQUITY SHARES OF 1 0,10,000/-, THEN, THE VALUE PER SHARE COMES TO RS.658.83 WHICH IS MORE THAN THE PRE MIUM OF RS.5/- CHARGED BY THE ASSESSEE ON A SHARE OF RS.10/-. WE, THEREFORE, FIN D MERIT IN THE ARGUMENT OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE VALUATION OF THE SHARES SHOULD BE MADE ON THE BASIS OF VARIOUS FACTORS AND NOT MERELY ON THE BASI S OF FINANCIALS AND THE SUBSTANTIATION OF THE FAIR MARKET VALUE ON THE BASI S OF THE VALUATION DONE BY THE ASSESSEE SIMPLY CANNOT BE REJECTED WHERE THE ASSESS EE HAS DEMONSTRATED WITH EVIDENCE THAT THE FAIR MARKET VALUE OF THE ASSET IS MUCH MORE THAN THE VALUE SHOWN IN THE BALANCE SHEET. THE ORDER OF THE CIT(A) IS A CCORDINGLY SET ASIDE AND THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 13. IN THE RESULT, THE APPEAL FILED BY THE ASSESS EE IS ALLOWED. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 2 7.09.2019. SD/- SD/- (SUDHANSHU SRIVASTAVA) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTA NT MEMBER DATED: 27 TH SEPTEMBER, 2019 DK ITA NO.7262/DEL/2017 11 COPY FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASSTT. REGISTRAR, ITAT, NEW DELHI