M/S SAHU MINERALS AND PROPERTIES LTD., JAIPUR V. INCOME TAX OFFICER, JAIPUR

ITA 895/JPR/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6168 (ITAT-JAIPUR)
• Duration Of Justice: 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 29-11-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D S KOTHARI
• Assessee Lawyers: RAJEEV SOGANI C A DHK
• Keywords: Fair market value; Valuation report
• Section: 56

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKWO] U;KF;D LNL; ,OA JH FOE FLAG ;K NO ] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM AND SHRI VIKRAM SING H YADAV, AM VK;DJ VIHY LA-@ ITA NO. 895/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2014-15. M/S. SAHU MINERALS AND PROPERTIES LTD., PLOT NO. D-04, SECOND FLOOR, LALPURA HOUSE, SHAKTI SINGH MARG, JAIPUR. CUKE VS. THE INCOME TAX OFFICER, WARD 2(2), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAFCS 9161 A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI D.S. KOTHARI (CIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI RAJEEV SOGANI (CA) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 06.03.2018 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 02/05/2018. VKNS'K@ ORDER PER VIJAY PAL RAO, JM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 27 TH SEPTEMBER, 2017 OF LD. CIT (A)-I, JAIPUR FOR THE ASSESSMENT YEAR 2014-15. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS :- 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT (A) HAS ERRED IN HOLDING THAT THE ASSESSING OFFICER WHO PASSED THE I MPUGNED ASSESSMENT ORDER HAD PROPER JURISDICTION OVER THE A PPELLANT COMPANY. RELIEF MAY PLEASE BE GRANTED BY QUASHING THE ENTIRE ASSESSMENT ORDER BEING WITHOUT JURISDICTION. 2.(A) IN THE FACTS AND CIRCUMSTANCES OF THE CASE LD . CIT (A) HAS ERRED IN CONFIRMING THE ACTION OF THE LD. AO IN ADDING A SUM OF RS. 42,83,96,680/- U/S 56(2)(VIIB) OF INCOME TAX ACT, 1 961, ON ACCOUNT OF ALLEGED EXCESS SHARE PREMIUM AMOUNT RECEIVED BY THE ASSESSEE COMPANY. THE ACTION OF LD. CIT (A) IS ILLEGAL, UNJU STIFIED, ARBITRARY AND 2 ITA NO. 895/JP/2017 M/S. SAHU MINERALS AND PROPERTIES LTD., JAIPUR. AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY DELETING THE SAID ADDITION OF RS. 42,83,96,680/-. (B) IN THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT (A) HAS ERRED IN INTERPRETING AND APPLYING THE RULES 11 U AND 11UA O F INCOME TAX RULES, 1962. THE ACTION OF LD. CIT (A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAINST THE F ACTS OF THE CASE. RELIEF MAY PLEA SE BE GRANTED BY APPLYING THE SAID RULES PROPERLY AND DELETING THE A DDITION OF RS. 42,83,96,680/-. (C) IN THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT (A) HAS ERRED IN NOT ACCEPTING THE CONTENTION OF THE ASSESSEE COMPANY OF IT BEING A COMPANY IN WHICH PUBLIC IS SUBSTANTIALLY INTERESTED U/S 2(18) OF THE INCOME TAX ACT, 1961 AND, ACCORDINGLY, PROVISION OF SECTION 56(2)(VIIB) BEING APPLICABLE. RELIEF MAY PLEASE BE GRANTED BY D ELETING THE SAID ADDITION OF RS. 42,83,96,680/-. (D) IN THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT (A) HAS ERRED IN NOT ACCEPTING THE FMV OF LAND AT RS. 21,73,21,000/- FOR THE PURPOSE OF VALUING EQUITY SHARES OF THE COMPANY FOR DETERMININ G EXCESS PREMIUM CHARGEABLE TO TAX U/S 56(2)(VIIB). THE ACTION OF LD . CIT (A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY DELETING THE ADDITION OF RS. 4 2,83,96,680/- BEING NO EXCESS PREMIUM RECEIVED BY THE COMPANY. (E) IN THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT (A) HAS ERRED IN REJECTING THE VALUATION REPORT OF CHARTERED ACCOUNT ANT AS WELL AS APPROVED VALUER FOR DETERMINING THE VALUE OF EQUITY SHARES OF COMPANY TO DETERMINE EXCESS PREMIUM CHARGEABLE TO TAX U/S 5 6(2)(VIIB). THE ACTION OF LD. CIT (A) IS ILLEGAL, UNJUSTIFIED, ARBI TRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY BE PLEASE GRANTED BY VALUING THE SHARES IN ACCORDANCE WITH THE REPORT OF CHARTERED ACCOUNTANT AS WELL AS APPROVED VALUER AND DELETING THE ADDITION OF RS. 42 ,83,96,680/-. (F) IN THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT (A) HAS ERRED IN CONFIRMING THE VALUATION OF EQUITY SHARES OF THE CO MPANY DONE BY LD. A.O. THE ACTION OF LD. CIT (A) IS ILLEGAL, UNJUSTIF IED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY ACCEPTING THE VALUATION DONE BY ASSESSEE. 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE LD. C IT (A) HAS ERRED IN NOT ALLOWING THE SET OFF OF THE CURRENT YEAR LOSS OF RS . 3,97,619/- FROM THE ADDITION MADE U/S 56(2)(VIIB). THE ACTION OF LD. CI T (A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY ALLOWING THE SET OFF OF CURREN T YEAR LOSS CLAIMED BY THE ASSESSEE, AS PER THE PROVISIONS OF INCOME TA X ACT, 1961. 3 ITA NO. 895/JP/2017 M/S. SAHU MINERALS AND PROPERTIES LTD., JAIPUR. 4. THE ASSESSEE CRAVES ITS RIGHT TO ADD, AMEND OR A LTER ANY OF THE GROUNDS ON OR BEFORE THE HEARING. 2. AT THE TIME OF HEARING, THE LD. A/R OF THE ASSES SEE HAS STATED AT BAR THAT THE ASSESSEE DOES NOT PRESS GROUND NO. 1, 2(C) AND 3 OF THE ASSESSEES APPEAL AND THE SAME MAY BE DISMISSED AS NOT PRESSED. THE LD. D/R H AS RAISED NO OBJECTION IF THESE GROUNDS OF THE ASSESSEE ARE DISMISSED AS NOT PRESSE D. ACCORDINGLY, GROUND NOS. 1, 2(C) AND 3 OF THE ASSESSEES APPEAL ARE DISMISSED B EING NOT PRESSED. GROUND NO. 2 (A), (B) AND (D) TO (F) ARE REGARDING COMPUTATION OF FAIR MARKET VALUE OF SHARES AND CONSEQUENTIAL EXCESS SHA RE PREMIUM ON ALLOTMENT OF SHARES BY CONSIDERING THE BOOK VALUE O F THE ASSETS INSTEAD OF MARKET VALUE OF THE LAND HELD BY THE ASSESSEE AS AS SET. 3. THE BRIEF FACTS RELEVANT TO THE ISSUE ARE THAT D URING THE YEAR UNDER CONSIDERATION THE ASSESSEE COMPANY RECEIVED A SUM O F RS. 43,74,10,000/- FROM M/S. URJA GLOBAL LTD. AGAINST THE ALLOTMENT OF SHARES. THE DETAILS OF THE AMOUNT RECEIVED BY THE ASSESSEE DURING THE THREE ACCOUNTING YEARS A RE REPRODUCED BY THE LD. CIT (A) IN PARA 1.1 AS UNDER :- PERIOD AMOUNT RECEIVED CUMULATIVE BALANCE 01.04.2011 31.03.2012 41,32,60,000/- 41,32,60,000 /- 01.04,2012 31.03.2013 2,60,50,000/- 43,93,10,000/ - 01.04.2013 27.02.2014 6,00,000/- RECEIVED (25,00,000/-) REPAID 43,74,10,000/- 4 ITA NO. 895/JP/2017 M/S. SAHU MINERALS AND PROPERTIES LTD., JAIPUR. AGAINST THE RECEIPT OF THE SAID AMOUNT OF RS. 43,74 ,10,000/-, THE ASSESSEE ISSUED SHARES OF FACE VALUE OF RS. 79,45,450/- AND THE BAL ANCE AMOUNT OF RS. 42,90,54,300/- WAS RECEIVED AS SHARE PREMIUM. THUS THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION ISSUED 7,94,545 SHARES OF FACE VALUE OF RS. 10/- EACH AT A PREMIUM OF RS. 540/- PER SHARE. THE AO PROPOSED TO EXAMINE THE ISSUE AS PER THE PROVISIONS OF SECTION 56(2)(VIIB) OF THE ACT. THE AO VALUED THE SHARES OF THE ASSESSEE BY CONSIDERING THE BOOK VALUE OF THE ASSET S SHOWN IN THE BALANCE SHEET OF THE ASSESSEE AS ON 31 ST MARCH, 2014. THE AO COMPUTED THE VALUE OF THE SHA RES AS PER RULE 11UA OF THE INCOME TAX RULES AND ARRIVED T O THE FAIR MARKET VALUE OF THE SHARES AS AT NEGATIVE. ACCORDINGLY, THE AO MADE AN ADDITION OF THE ENTIRE AMOUNT OF RS. 42,90,54,300/- RECEIVED ON ACCOUNT OF SECURITIE S PREMIUM BY TREATING THE FAIR MARKET VALUE OF THE SHARES AS NEGATIVE. THE ASSESS EE CHALLENGED THE ACTION OF THE AO BEFORE LD. CIT (A) AND CONTENDED THAT THE AO HAS ARRIVED AT WRONG FAIR MARKET VALUE OF SHARES OF THE ASSESSEE WITHOUT CONSIDERING THE MARKET PRICE OF THE LAND HELD BY THE ASSESSEE AT 19/1, BURDWAN ROAD, KOLKATA MUNI CIPAL CORPORATION, WARD NO. 74, ALIPORE, DIST. SOUTH 24 PARGANAS. THE ASSESSEE CLAIMED THAT THE ASSESSEE HAD PURCHASED THE LAND MEASURING 1 BIGHA 9 KATHA AND 2 CHATTAKS VIDE PURCHASE DEED DATED 31 ST MARCH, 1970 FOR A CONSIDERATION OF RS. 23,19,211/- WHICH IS SHOWN IN THE BALANCE SHEET. HOWEVER, THE MARKET PRICE OF THE SAI D LAND HAS BEEN CONSIDERED AT RS. 21,73,21,000/- AS PER THE VALUATION REPORT PROD UCED BY THE ASSESSEE BEFORE THE AO. THE LD. CIT (A) THOUGH EXAMINED THE VALUATION R EPORT SUBMITTED BY THE ASSESSEE, HOWEVER, THE SAME WAS REJECTED ON THE GRO UND THAT THE REGISTERED VALUER HAS ESTIMATED THE FAIR MARKET VALUE OF THE LAND AFT ER MAKING THE DEDUCTION OF ENCROACHMENT/ENCUMBRANCES ETC. AT 32% OF SUCH VALUE AND ACCORDINGLY ARRIVED AT 5 ITA NO. 895/JP/2017 M/S. SAHU MINERALS AND PROPERTIES LTD., JAIPUR. THE ESTIMATED FAIR MARKET VALUE OF THE LAND AT RS. 21.73 CRORES WITHOUT SPECIFYING THE NATURE OF THESE ENCROACHMENTS/ENCUMBRANCES. THUS T HE LD. CIT (A) WAS OF THE VIEW THAT THE CERTIFICATE ISSUED BY THE REGISTERED VALUE R WAS NOT BASED ON ANY COMPARATIVE SALE INSTANCE BUT IT IS BASED ONLY ON T HE PHOTOCOPIES OF THE DOCUMENTS PRODUCED BY THE ASSESSEE. FURTHER, ALL OTHER EXPEN DITURES ON ACCOUNT OF DEVELOPMENT, EXECUTION SERVICES, OVERHEAD COSTS AND ALL ADMINISTRATIVE COSTS ETC. WERE TAKEN FOR THE PURPOSE OF VALUATION ON ESTIMATE AND LUMP SUM BASIS WITHOUT SPECIFYING ANY BREAK-UP FOR THE SAME. ACCORDINGLY, THE LD. CIT (A) REJECTED THE VALUATION REPORT PRODUCED BY THE ASSESSEE AND UPHEL D THE ACTION OF THE AO IN TAKING THE FAIR MARKET VALUE OF THE SHARES AS NEGATIVE AND CONSEQUENTIAL ADDITION ON ACCOUNT OF SHARE PREMIUM UNDER SECTION 56(2)(VIIB) OF THE ACT. 3.1. BEFORE US, THE LD. A/R OF THE ASSESSEE HAS SUB MITTED THAT AS PER EXPLANATION (A)(II) TO SECTION 56(2)(VIIB) THE ASSESSEE HAS TO SUBSTANTIATE THE VALUATION OF ITS SHARES WITH REFERENCE TO MARKET VALUE OF ITS ASSETS . THEREFORE, THE VALUATION DETERMINED BY THE AO ON THE BASIS OF BOOK VALUE IS NOT AS PER THE PROVISIONS OF SECTION 56(2)(VIIB) OF THE ACT READ WITH EXPLANATIO N (A)(II). THE LD. A/R HAS SUBMITTED THAT THE VALUE AS PER THE SAID EXPLANATIO N HAS TO BE TAKEN AS MARKET VALUE AND, THEREFORE, THE FAIR MARKET VALUE OF THE SHARES WERE RIGHTLY DETERMINED IN THE VALUATION REPORT PRODUCED BY THE ASSESSEE AS PER TH E CERTIFICATE OF THE REGISTERED VALUER. HE HAS FURTHER CONTENDED THAT THE ASSESSEE COMPANY HAS TAKEN THE FAIR MARKET VALUE OF ITS LAND AT RS. 21,73,21,000/- AFTE R GIVING DUE DEDUCTION ON ACCOUNT OF ENCROACHMENTS/ENCUMBRANCES @ 32%. THE AO HAS TA KEN THE VALUE OF THE LAND AT BOOK VALUE OF RS. 23,19,211/- WHICH IS NOT THE M ANDATE OF THE PROVISIONS OF SECTION 56(2)(VIIB). THE ASSESSEE HAD SUBSTANTIATE D THE VALUATION BY PRODUCING THE 6 ITA NO. 895/JP/2017 M/S. SAHU MINERALS AND PROPERTIES LTD., JAIPUR. VALUATION REPORT OF THE CHARTERED ACCOUNTANT SHRI R ITESH GUPTA AS WELL AS THE VALUATION REPORT OF GOVERNMENT APPROVED VALUER. FU RTHER, A CERTIFICATE FROM THE RELEVANT AUTHORITY FROM GOVERNMENT OF WEST BENGAL C ERTIFYING THE VALUE OF THE LAND WAS ALSO PRODUCED. THE LD. A/R HAS FORCEFULLY CONT ENDED THAT WHEN THE CHARTERED ACCOUNTANT HAS EVALUATED THE INFORMATION BY USING H IS EXPERT KNOWLEDGE AND ONLY ON HIS SATISFACTION HE HAS ISSUED THE CERTIFICATE, THEN THE VALUATION REPORT BASED ON THE CERTIFICATE OF THE CHARTERED ACCOUNTANT CANNOT BE REJECTED WITHOUT BRINGING THE CONTRARY MATERIAL ON RECORD. THE LD. CIT (A) HAS G IVEN THE INSTANCE OF DLC RATES OF THE SIMILARLY SITUATED LAND WHICH ALSO CORROBORATES THE CLAIM OF THE ASSESSEE THOUGH THE RATES CITED BY THE LD. CIT (A) WERE WITHOUT ANY DEDUCTION ON ACCOUNT OF ENCROACHMENTS/ENCUMBRANCES. THUS THE LD. A/R HAS S UBMITTED THAT THE REJECTION OF VALUATION REPORT BY THE LD. CIT (A) IS NOT JUSTIFIE D. HE HAS FURTHER CONTENDED THAT THE ASSESSEE HAD MADE A SPECIFIC REQUEST FOR REFERRING THE LAND VALUATION TO THE DVO. HOWEVER, THE AO REJECTED THE REQUEST FOR REFERENCE TO THE DVO ON THE REASON THAT NO SUCH REFERENCE IS POSSIBLE UNDER SECTION 56(2)(V IIB) AND THAT THE REFERENCE UNDER SECTION 55A IS RELATED WITH CAPITAL GAIN INCOME. T HE LD. A/R OF THE ASSESSEE HAS REFERRED TO THE PROVISIONS OF SECTION 55A AND CONTE NDED THAT THE SECTION PROVIDES ASCERTAINING THE FAIR MARKET VALUE OF A CAPITAL ASS ET FOR THE PURPOSE OF THIS CHAPTER. THEREFORE, SECTION 56 AS WELL AS SECTION 55A FALL I N THE SAME CHAPTER IV OF THE ACT AND HENCE THE PROVISIONS OF SECTION 55A ARE APPLICA BLE FOR ASCERTAINING THE VALUATION OF THE LAND FOR THE PURPOSE OF SECTION 56(2)(VIIB) OF THE ACT. HE HAS FURTHER CONTENDED THAT EVEN OTHERWISE AS PER SECTION 142A O F THE ACT, THE AO IS EMPOWERED TO REFER THE VALUATION OF ANY ASSET TO VALUATION OF FICER FOR THE PURPOSE OF ASSESSMENT OR RE-ASSESSMENT. THUS THE LD. A/R HAS SUBMITTED T HAT THE REJECTION OF THE REQUEST 7 ITA NO. 895/JP/2017 M/S. SAHU MINERALS AND PROPERTIES LTD., JAIPUR. BY THE AO IS CONTRARY TO THE PROVISIONS OF LAW. THE LD. CIT (A) HAS TAKEN UP THE ROLE OF VALUATION OFFICER WHILE DECIDING THE ISSUE INSTE AD OF REFERRING THE MATTER TO THE DVO. IN SUPPORT OF HIS CONTENTION, HE HAS RELIED U PON THE DECISION OF MUMBAI BENCH OF THE TRIBUNAL IN CASE OF PATEL INDIA VS. DCIT, 10 5 TAXMAN 28. THE LD. A/R HAS SUBMITTED THAT THE MUMBAI BENCH OF THE TRIBUNAL HAS OBSERVED THAT THE VALUATION IS A HIGHLY TECHNICAL MATTER AND DESERVES TO BE REFERR ED TO THE VALUATION CELL. 3.2. ON THE OTHER HAND, THE LD. D/R HAS SUBMITTED T HAT EXPLANATION (A)(II) PROVIDES FAIR MARKET VALUE OF THE SHARES SHALL BE THE VALUE SUBSTANTIATED BY THE COMPANY TO THE SATISFACTION OF THE AO BASED ON THE VALUE ON TH E DATE OF ISSUE OF SHARES, OF ITS ASSETS INCLUDING INTANGIBLE ASSET. HE HAS REFERRED TO THE FINDING OF LD. CIT (A) AND SUBMITTED THAT THE LD. CIT (A) HAS GIVEN THE COGENT REASONS FOR REJECTING THE VALUATION REPORT PRODUCED BY THE ASSESSEE AS THE SA ID REPORT WAS PREPARED WITHOUT SPECIFYING BASIS OF VALUATION AND MERELY BASED ON T HE INFORMATION PROVIDED BY THE ASSESSEE. THE LD. D/R HAS FURTHER REFERRED TO THE CERTIFICATE OF THE CHARTERED ACCOUNTANT AND SUBMITTED THAT EVEN IN THE CERTIFICA TE, THE CHARTERED ACCOUNTANT HAS TAKEN THE NET ASSET METHOD AS ON THE DATE OF CERTIF ICATE WHEREAS THE VALUATION REPORT WAS PREPARED ON 28 TH JULY, 2016 AND VALUATION WAS DETERMINED AS ON THE MONTH OF FEBRUARY, 2014. THUS THE LD. D/R HAS SUBM ITTED THAT THE CERTIFICATE OF CHARTERED ACCOUNTANT IS PREPARED ONLY AFTER THE VAL UATION REPORT AND NOT BEFORE THE VALUATION REPORT. THERE IS NO BASIS FOR APPLYING T HE RATE OF LAND IN QUESTION FOR THE PURPOSE OF VALUATION AND FURTHER AGAIN THERE WAS NO BASIS FOR ALLOWING THE DISCOUNT ON ACCOUNT OF ENCROACHMENT. THE LD. D/R HAS FURTHE R REFERRED TO THE CERTIFICATE OF GOVERNMENT OF WEST BENGAL REGARDING MARKET VALUE AT PAGE 37 AND SUBMITTED THAT THE SET FORTH VALUE IS GIVEN AT RS. 9.98 CRORES. 8 ITA NO. 895/JP/2017 M/S. SAHU MINERALS AND PROPERTIES LTD., JAIPUR. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THE ONLY DISPUTE RAISED BEFORE US IS REGAR DING THE FAIR MARKET VALUE OF THE SHARES OF THE ASSESSEE AND FURTHER THE VALUE OF THE LAND IN QUESTION WHICH IS AT VARIANCE AS TAKEN BY THE ASSESSEE AND ADOPTED BY TH E AO ON DIFFERENT PARAMETERS. THE AO HAS ADOPTED THE VALUE OF THE LAND FOR THE PU RPOSE OF COMPUTING THE NET WORTH OF THE ASSESSEE AS PER THE BOOK VALUE SHOWN I N THE BALANCE SHEET WHEREAS THE ASSESSEE HAS CLAIMED THE VALUE OF THE LAND BY C ONSIDERING THE MARKET PRICE OF THE LAND AND AFTER ALLOWING THE DEDUCTION @ 32% ON ACCOUNT OF ENCROACHMENT/ENCUMBRANCES. AS PER THE PROVISIONS O F SECTION 56(2)(VIIB), THE INCOME BEING THE DIFFERENCE BETWEEN THE CONSIDERATI ON RECEIVED BY THE ASSESSEE COMPANY FOR ISSUE OF SHARES AND THE FAIR MARKET VAL UE OF THE SHARES. THUS IN CASE THE CONSIDERATION RECEIVED AGAINST THE ISSUE/ALLOTM ENT OF SHARES EXCEEDS THE FAIR MARKET VALUE OF THE SHARES, THE SAID EXCESS AMOUNT RECEIVED BY THE ASSESSEE HAS TO BE ASSESSED AS INCOME FROM OTHER SOURCES. EXPLANAT ION TO SECTION 56(2)(VIIB) DEFINES THE FAIR MARKET VALUE OF THE SHARES. FOR R EADY REFERENCE, WE REPRODUCE PROVISIONS OF SECTION 56(2)(VIIB) AND EXPLANATION ( A)(II) AS UNDER :- 56. (1) XXXXX XXXXXX. (2) IN PARTICULAR, AND WITHOUT PREJUDICE TO THE GEN ERALITY OF THE PROVISIONS OF SUB-SECTION (1), THE FOLLOWING INCOMES, SHALL BE CH ARGEABLE TO INCOME-TAX UNDER THE HEAD 'INCOME FROM OTHER SOURCES', NAMELY : [( VIIB ) WHERE A COMPANY, NOT BEING A COMPANY IN WHICH THE P UBLIC ARE SUBSTANTIALLY INTERESTED, RECEIVES, IN ANY PREVIOUS YEAR, FROM ANY PERSON BEING A RESIDENT, ANY CONSIDERATION FOR ISSUE OF SHARES THAT EXCEEDS THE FACE VALUE OF SUCH SHARES, THE AGGREGATE CONSIDERATION RECEIVED FOR SUCH SHARES AS EXCEEDS THE FAIR MARKET VALUE OF THE SHARES: PROVIDED THAT THIS CLAUSE SHALL NOT APPLY WHERE THE CONSIDERATION FOR ISSUE OF SHAR ES IS RECEIVED 9 ITA NO. 895/JP/2017 M/S. SAHU MINERALS AND PROPERTIES LTD., JAIPUR. ( I ) BY A VENTURE CAPITAL UNDERTAKING FROM A VENTURE CAP ITAL COMPANY OR A VENTURE CAPITAL FUND; OR ( II ) BY A COMPANY FROM A CLASS OR CLASSES OF PERSONS AS MAY BE NOTIFIED 67 BY THE CENTRAL GOVERNMENT IN THIS BEHALF. EXPLANATION. FOR THE PURPOSES OF THIS CLAUSE, ( A ) THE FAIR MARKET VALUE OF THE SHARES SHALL BE THE VA LUE ( I ) XXXXXX XXXXXX ( II ) AS MAY BE SUBSTANTIATED BY THE COMPANY TO THE SATISFACTION OF THE ASSESSING OFFICER, BASED ON THE VALUE, ON THE DATE OF ISSUE OF SHARES, OF ITS ASSETS, INCLUDING INTANGIBLE ASSETS BEING GO ODWILL, KNOW- HOW, PATENTS, COPYRIGHTS, TRADEMARKS, LICENCES, FRANCHIS ES OR ANY OTHER BUSINESS OR COMMERCIAL RIGHTS OF SIMILAR NATURE, WHICHEVER IS HIGHER; THUS AS PER CLAUSE (A) OF THE EXPLANATION, THE FAIR MARKET VALUE OF SHARES SHALL BE THE VALUE AS MAY BE DETERMINED IN ACCORDANCE WITH T HE METHODS PRESCRIBED.THE METHOD FOR THIS PURPOSE IS PRESCRIBED UNDER RULE 11 UA OF IT RULES. FURTHER, IF THE VALUATION AS ADOPTED BY THE ASSESSEE IS SUBSTANTIAT ED ON THE BASIS OF THE VALUE OF ITS ASSETS TO THE SATISFACTION OF THE AO, THEN THE SAID VALUE AS CLAIMED BY THE ASSESSEE SHALL BE THE FAIR MARKET VALUE OF THE SHARES. IN CA SE THE AO IS NOT SATISFIED WITH THE VALUE AS CLAIMED BY THE ASSESSEE THEN THE ONLY OPTI ON WITH THE AO TO DETERMINE THE FAIR MARKET VALUE IN ACCORDANCE WITH THE METHOD PRE SCRIBED UNDER RULE 11UA OF IT RULES. FURTHER, THE VALUE SO DETERMINED AS PRESCRI BED IN RULES OR AS PER THE VALUE BASED ON THE ASSETS OF THE COMPANY WHICHEVER IS HIG HER HAS TO BE TAKEN INTO CONSIDERATION. THUS IF THE VALUE DETERMINED AS PE R THE PRESCRIBED METHOD IS HIGHER THAN THE FAIR MARKET VALUE BASED ON THE VALUE OF TH E ASSETS OF THE COMPANY THEN THE VALUE SO DETERMINED ON THE BASIS OF PRESCRIBED METH OD BEING THE HIGHER ONE HAS TO BE TAKEN INTO CONSIDERATION FOR THE PURPOSE OF DETE RMINING THE FAIR MARKET VALUE OF THE SHARES AND DIFFERENTIAL CONSIDERATION, IF ANY, TO BE TAKEN INTO ACCOUNT 10 ITA NO. 895/JP/2017 M/S. SAHU MINERALS AND PROPERTIES LTD., JAIPUR. FOR THE PURPOSE OF MAKING ADDITION UNDER SECTION 56 (2)(VIIB). IN THE CASE IN HAND, THE AO HAS CONSIDERED ONLY THE NET ASSET METHOD TO DETERMINE THE FAIR MARKET VALUE. RULE 11UA PRESCRIBES THE METHOD OF COMPUTING THE FA IR MARKET VALUE OF UNQUOTED EQUITY SHARES FOR THE PURPOSE OF CLAUSE (A)(I) OF E XPLANATION TO SECTION 56(2)(VIIB). FOR READY REFERENCE, WE REPRODUCE RULE 11UA(2) AS U NDER :- [RULE 11UA (1) XXXX XXXXX (2) NOTWITHSTANDING ANYTHING CONTAINED IN SUB-CLAUS E ( B ) OF CLAUSE ( C ) OF SUB-RULE (1), THE FAIR MARKET VALUE OF UNQUOTED EQUITY SHARE S FOR THE PURPOSES OF SUB-CLAUSE ( I ) OF CLAUSE ( A ) OF EXPLANATION TO CLAUSE ( VIIB ) OF SUB-SECTION (2) OF SECTION 56 SHALL BE THE VALUE, ON THE VALUATION DATE, OF SUCH UNQUOTED EQUITY SHARES AS DETERMINED IN THE FOLLOWING MANNER UNDER CLAUSE ( A ) OR CLAUSE ( B ), AT THE OPTION OF THE ASSESSEE, NAMELY: ( A ) THE FAIR MARKET VALUE OF UNQUOTED EQUITY SHARES = (AL) (PV), (PE) WHERE, A = BOOK VALUE OF THE ASSETS IN THE BALANCE- SHEET AS REDUCED BY ANY AMOUNT OF TAX PAID AS DEDUCTION OR COLLECTION AT SOURCE OR AS ADVANCE TAX PAYMENT AS REDUCED BY THE AMOUNT OF TAX CLAIMED AS REFUND UNDER THE INCOME-TA X ACT AND ANY AMOUNT SHOWN IN THE BALANCE- SHEET AS ASSET INCLUDING THE UNAMORTISED AMOUNT OF DEFERRED EXPENDITURE WHICH DOES NOT REPRESENT THE VALUE OF A NY ASSET; L = BOOK VALUE OF LIABILITIES SHOWN IN THE BALANCE-SHEE T, BUT NOT INCLUDING THE FOLLOWING AMOUNTS, NAMELY: ( I ) THE PAID-UP CAPITAL IN RESPECT OF EQUITY SHARES; ( II ) THE AMOUNT SET APART FOR PAYMENT OF DIVIDENDS ON PR EFERENCE SHARES AND EQUITY SHARES WHERE SUCH DIVIDENDS HAVE NOT BEEN DE CLARED BEFORE THE DATE OF TRANSFER AT A GENERAL BODY MEETING OF THE COMPANY; ( III ) RESERVES AND SURPLUS, BY WHATEVER NAME CALLED, EVEN IF THE RESULTING FIGURE IS NEGATIVE, OTHER THAN THOSE SET APART TOWARDS DEPREC IATION; ( IV ) ANY AMOUNT REPRESENTING PROVISION FOR TAXATION, OTH ER THAN AMOUNT OF TAX PAID AS DEDUCTION OR COLLECTIO N AT SOURCE OR AS ADVANCE TAX PAYMENT AS REDUCED BY THE AMOUNT OF TAX CLAIMED AS REFUND UNDE R THE INCOME- TAX ACT, TO THE EXTENT OF THE EXCESS OVER THE TAX PAYABLE WITH REFERENCE TO THE BOOK PROFITS IN ACCORDANCE WITH THE LAW APPLICABLE THERETO; ( V ) ANY AMOUNT REPRESENTING PROVISIONS MADE FOR MEETING LIA BILITIES, OTHER THAN ASCERTAINED LIABILITIES; ( VI ) ANY AMOUNT REPRESENTING CONTINGENT LIABILITIES OTHE R THAN ARREARS OF 11 ITA NO. 895/JP/2017 M/S. SAHU MINERALS AND PROPERTIES LTD., JAIPUR. DIVIDENDS PAYABLE IN RESPECT OF CUMULATIVE PREFEREN CE SHARES; PE = TOTAL AMOUNT OF PAID UP EQUITY SHARE CAPITAL AS SHO WN IN THE BALANCE-SHEET; PV = THE PAID UP VALUE OF SUCH EQUITY SHARES; OR ( B ) THE FAIR MARKET VALUE OF THE UNQUOTED EQUITY SHARES DETERMINED BY A MERCHANT BANKER OR AN ACCOUNTANT AS PER THE DISCOUNTED FREE CASH FL OW METHOD. ] THUS SUB-RULE (2) OF RULE 11UA PRESCRIBES TWO METHO DS OF COMPUTING THE FAIR MARKET VALUE OF SHARES AND AN OPTION IS GIVEN TO THE ASSES SEE FOR ADOPTING THE VALUE BY APPLYING EITHER OF THE TWO METHODS. THE FIRST METH OD IS BASED ON THE NET WORTH OF THE COMPANY WHICH WAS THOUGH TAKEN BY THE AO AND TH E SECOND METHOD IS BASED ON THE FAIR MARKET VALUE AS DETERMINED BY A MERCHANDIS E BANKER OR AN ACCOUNTANT AS PER THE DISCOUNT FREE CASH FLOW METHOD. THUS AS PE R THE FIRST METHOD, THE ASSETS ARE TO BE TAKEN AS PER THE BOOK VALUE OF THE ASSETS SHOWN IN THE BALANCE SHEET AND, THEREFORE, THIS METHOD DOES NOT PRESCRIBE THE FAIR MARKET PRICE OF THE ASSET. THE AO HAS APPLIED THE FIRST METHOD AS PER THE RULE 11UA(2 ). IT APPEARS THAT EVEN IN THE VALUATION REPORT, THE VALUER HAS ALSO APPLIED THIS METHOD AND HAS NOT CHOSEN THE METHOD BASED ON DISCOUNT FREE CASH FLOW METHOD. HEN CE, BOTH THE AO AS WELL AS THE ASSESSEE OPTED THE METHOD PROVIDED UNDER CLAUSE (A) OF RULE 11UA(2) OF IT RULES AND, THEREFORE, THERE WAS NO DISPUTE REGARDIN G THE NET ASSET/NET WORTH METHOD APPLIED BY THE AO AS WELL AS THE ASSESSEE. SINCE THE ASSESSEE HAS OPTED ONLY THE FIRST METHOD, THEREFORE, THERE IS NO QUEST ION OF EXAMINING THE VALUE OF THE SHARES AS PER THE SECOND METHOD PROVIDED IN CLAUSE (B) OF RULE 11UA(2). THE ONLY DISPUTE IS THE ADOPTION OF THE VALUE OF THE LAND WH ICH IS SHOWN AS ASSET IN THE BALANCE SHEET AT BOOK VALUE BY THE AO AND AT MARKET PRICE BY THE ASSESSEE. GOING BY THE LANGUAGE AND PROCESS AS PRESCRIBED UNDER CLA USE (A) OF RULE 11UA(2), THE 12 ITA NO. 895/JP/2017 M/S. SAHU MINERALS AND PROPERTIES LTD., JAIPUR. ONLY INFERENCE CAN BE DRAWN IS THAT THE BOOK VALUE OF THE ASSETS IN THE BALANCE SHEET HAS TO BE TAKEN INTO ACCOUNT BY REDUCING THE BOOK VALUE OF THE LIABILITIES AS WELL AS OTHER DEDUCTIONS AS PRESCRIBED THEREUNDER A ND, THEREFORE, THE QUESTION OF TAKING THE MARKET PRICE OF THE ASSET DOES NOT ARISE UNDER THE SAID METHOD. SINCE THE ASSESSEE HAS NOT DISPUTED THE METHOD AND HAS OPTED ONLY THE NET WORTH METHOD AS PRESCRIBED UNDER THE RULE, THEREFORE, WE CANNOT GO TO EXAMINE THE APPLICABILITY OF THE OTHER METHOD IN THE CASE OF THE ASSESSEE. THUS WHEN THE RULE DOES NOT PROVIDE THE MARKET PRICE OF THE ASSET, THEN THE ASSESSEES CLAIM HAS NO LEG TO STAND AND ACCORDINGLY THE APPEAL OF THE ASSESSEE IS WITHOUT A NY MERIT. 4.1. EVEN OTHERWISE, THE VALUATION REPORT AS PRODU CED BY THE ASSESSEE IS NOT BASED ON THE PHYSICAL VERIFICATION AND GROUND REALI TIES OF THE ASSET BUT THE SAME IS BASED ON THE INFORMATION PROVIDED BY THE ASSESSEE A ND AS PER THE BOOKS OF ACCOUNT OF THE ASSESSEE. THUS THE SAID VALUATION NOT BASED ON THE REAL STATUS OF THE ENCROACHMENT/ENCUMBRANCES ON THE LAND IN QUESTION C ANNOT BE ACCEPTED AS IT IS ONLY AN ESTIMATION ON THE BASIS OF THE INFORMATION PROVIDED BY THE ASSESSEE. FURTHER, THERE IS NOTHING IN THE VALUATION REPORT T O SUGGEST THAT THE VALUER HAS TAKEN INTO CONSIDERATION THE DURATION OF THE ENCROACHMENT AND THE ACTUAL AREA OF ENCROACHMENT OUT OF THE TOTAL LAND AND WHETHER THE ASSESSEE IS HAVING ANY CONTROL OR POSSESSION OVER THE LAND IN QUESTION. THEREFORE , IN THE ABSENCE OF ALL THESE FACTUAL ASPECTS TAKEN INTO CONSIDERATION, THE VALUA TION REPORT PREPARED ON THE BASIS OF THE INFORMATION PROVIDED BY THE ASSESSEE CANNOT BE ACCEPTED. THE LD. CIT (A) HAS CONSIDERED THIS ISSUE IN PARA XXI TO XXV OF HIS ORD ER AS UNDER :- 13 ITA NO. 895/JP/2017 M/S. SAHU MINERALS AND PROPERTIES LTD., JAIPUR. (XXI) IT WAS NOTED THAT THE ABOVE VALUATION WAS M ADE BY THE CHARTERED ACCOUNTANT ON THE BASIS OF INFORMATION AN D EXPLANATION PROVIDED BY THE APPELLANT COMPANY AND IT WAS NOT AN INDEPENDENT VALUATION AND WAS MADE WITHOUT VERIFYING THE VALUAT ION OF THE FIXED ASSET AND WITHOUT SPECIFYING THE BASIS FOR SUCH VAL UATION. IT IS PERTINENT TO MENTION HERE THAT IN THE VALUATION REPORT DATED 27.02.2014, THE CHARTERED ACCOUNTANT HAS TAKEN THE VALUE OF FIXED A SSETS AT RS. 21,73,21,000/- WHEREAS THE VALUATION CERTIFICATE WA S ISSUED BY THE REGISTERED VALUER ON 28.07.2016 WHEREIN THE MARKET VALUE OF THE PROPERTY OWNED BY THE COMPANY AT CALCUTTA AS ON 27. 02.2014, WAS ESTIMATED AT RS. 21,73,21,000/-. I FAIL TO UNDERST AND THAT HOW THE FIGURE OF RS. 21,73,21,000/- WAS PROVIDED TO THE CH ARTERED ACCOUNTANT BY THE APPELLANT COMPANY ON 27.02.2014 WHEN THE SAM E WAS DETERMINED BY THE REGISTERED VALUER ON 28.07.2016 I .E. DURING THE ASSESSMENT PROCEEDINGS ONLY. THEREFORE, IT COULD BE CONCLUDED THAT ALL THE DOCUMENTS WERE PREPARED IN ORDER TO JUSTIFY THE FMV OF THE EQUITY SHARES OF RS. 550/-. (XXII) IT WOULD BE APPROPRIATE TO REPRODUCE HEREUND ER THE BASIS OF VALUATION AS STATED IN THE VALUATION REPORT ISSUED BY THE REGISTERED VALUER AS UNDER :- (I) ACCORDING TO THE GOVERNMENT RECORDS AS ISSUED BY THE ASSURANCE OFFICE, MARKET VALUE OF LAND MEASURING 1 BIGHA 9 CO TTAH 2 CHITTAK IS RS. 32,00,46,672/- AS ON 07.03.2014. (II) AS ON SEPTEMBER 2014, RATE OF READY BUILT FLAT IS RUPEES 15,000 PER SQUARE FEET SUPER BUILT UP AREA. DEDUCTING 20% FOR THE RATE OF BUILT UP AREA PER SQUARE FEET = RS. 12,000 PER S QUARE FEET. WE CAN DERIVE THE LAND RATE AS ON SEPTEMBER 2014. (XXIII) IT MAY BE MENTIONED THAT THE REGISTERED VAL UER HAS ESTIMATED THE FAIR MARKET VALUE OF THE UNENCUMBERED LAND AS O N 27/02/2014 AT RS. 31,95,90,401/- AND AFTER MAKING DEDUCTION FOR E NCROACHMENTS OR ENCUMBRANCES ETC., DEDUCTED 32% OF SUCH VALUE AND E STIMATED THE ENCUMBERED FMV OF THE LAND AT RS. 21,73,21,000/- WI THOUT SPECIFYING THE NATURE OF THESE ENCROACHMENTS OR ENCUMBRANCES. IT WOULD BE APPROPRIATE TO REPRODUCE THE PART OF THE VALUATION CERTIFICATE AS UNDER :- THE FAIR MARKET VALUE IS INCLUSIVE OF ALL RELEVANT EXPENDITURES INVOLVED FOR DEVELOPMENT, EXECUTION SERVICES, OVERH EAD COSTS AND ALL ADMINISTRATIVE COSTS ETC. 14 ITA NO. 895/JP/2017 M/S. SAHU MINERALS AND PROPERTIES LTD., JAIPUR. VALUE VARIES WITH PURPOSE AND TIME. THIS VALUATION IS PREPARED FOR THE RECORD OF COMPANYS ASSET. THIS VALUATION S HOULD NOT BE REFERRED FOR ANY OTHER PURPOSE WHATSOEVER, OTHER TH AN SPECIFIED IN THIS REPORT. THE UNDERSIGNED HAS NOT VERIFIED ANY LEGAL DOCUMENT S. VALUATION IS PREPARED ON THE BASIS OF XEROX COPIES OF DOCUMENTS AND INFORMATION FROM THE COMPANYS REPRESENTATIVE. IF THE REPORT IS SUBMITTED TO AN INSTITUTION, IT IS ADVISE D THAT DECISION TAKEN ON THE BASIS OF LATEST LEGAL OPINION AND AFTE R VERIFICATION OF THE ORIGINAL DOCUMENTS. (XXIV) THUS, IT IS EVIDENT FROM THE CERTIFICATE ISS UED BY THE REGISTERED VALUE THAT IT WAS NOT BASED ON ANY COMPARATIVE SALE INSTANCE. THE REGISTERED VALUER HAS TAKEN INTO ACCOUNT THE FAIR M ARKET VALUE RELATING TO A FLAT, WHICH IS NOT AT ALL COMPARABLE. IT IS AN ESTABLISHED PRINCIPLE THAT AN APPLE CANNOT BE COMPARED WITH A MANGO. IT A PPEARS THAT THE REGISTERED VALUER HAS TAKEN INTO ACCOUNT ALL RELEVA NT EXPENDITURES INVOLVED FOR DEVELOPMENT, EXECUTION SERVICES, OVERH EAD COSTS AND ALL ADMINISTRATIVE COSTS ETC. FOR THE PURPOSES OF VALUA TION BUT WITHOUT SPECIFYING ANY BREAKUP FOR THE SAME. IT MAY BE MENT IONED THAT NO DEVELOPMENT OF THE LAND UNDER CONSIDERATION WAS UND ERTAKEN AT LEAST TILL 31.03.2014. THE REGISTERED VALUER HAS ALSO TA KEN INTO ACCOUNT THE MARKET VALUATION CERTIFICATE ISSUED BY THE DEPARTME NT OF REGISTRATION AND STAMP REVENUE DATED 07.03.2014 WHEREIN THE MARK ET VALUE WAS STATED AT RS. 32,00,46,672/-. IT IS NOTED FROM THE SO-CALLED CERTIFICATE ISSUED BY DEPARTMENT OF REGISTRATION AND STAMP REVE NUE THAT IT IS NOTHING BUT MARKET VALUE/CHARGEABILITY ASSESSMENT S LIP AND NOT A CERTIFICATE ISSUED BY ANY GOVERNMENT AUTHORITY. IT IS NOTED FROM THIS DOCUMENT THAT THE MARKET VALUE WAS STATED AT RS. 31 ,92,96,672/- AND THE SET FORTH VALUE AT RS. 9.98 CRORE. VIDE LETTE R DATED 07/09/2017, ISSUED BY AN ADVOCATE, IT WAS INFORMED THAT SET FO RTH VALUE MEANS VALUE DISCLOSED IN THE DEED WHILE REGISTERING A SAL E DEED. THE APPELLANT HAS NOT EXPLAINED WHY THE SET FORTH VALUE WAS STATED AT RS. 9.98 CRORE IN THE ABOVE REFERRED DOCUMENT FOR THE P ROPERTY UNDER CONSIDERATION. (XXV) I HAVE ALSO CHECKED THE RELEVANT WEBSITE OF T HE GOVERNMENT OF WEST BENGAL AND IT WAS OBSERVED THAT ON A SLIGHT VA RIATION OF ANY PARAMETER AS REQUIRED THEREIN, THE VALUATION CHANGE S SUBSTANTIALLY. A COPY OF THE SO CALLED VALUATION REPORT IS ENCLOSED HEREWITH AS ANNEXURE-A WHEREIN THE MARKET VALUE OF UNENCUMBERED , LITIGATION FREE LAND WAS DETERMINED AT RS. 26,81,97,548/-. THEREFOR E, THE DOCUMENT, 15 ITA NO. 895/JP/2017 M/S. SAHU MINERALS AND PROPERTIES LTD., JAIPUR. WHICH FORMS THE BASIS OF VALUATION REPORT HAS NO SA NCTITY IN THE EYES OF LAW AS IT WAS JUST AN ESTIMATE ON THE BASIS OF DETA ILS SUBMITTED BY THE PERSON WHO IS MAKING AN ONLINE QUERY AND WITHOUT TH E SPT VERIFICATION ON THE DETAILS OF THE PROPERTY AND ESPECIALLY LOOKI NG TO THE FACT THAT THE VALUATION DEPENDS UPON A NUMBER OF FACTORS. THEREFO RE, IN VIEW OF THE ABOVE DISCUSSION, IT IS HELD THAT THE REPORT OF REG ISTERED VALUER IS NOTHING BUT A SELF SERVING DOCUMENT WHICH CANNOT BE RELIED UPON DETERMINING THE FAIR MARKET VALUE OF THE IMMOVABLE PROPERTY OF THE APPELLANT AT CALCUTTA AND CONSEQUENTLY, THE VALUATI ON OF EQUITY SHARE OF THE APPELLANT COMPANY AS MADE BY THE CHARTERED ACCO UNTANT CANNOT BE GIVEN ANY COGNIZANCE AS THE SAME WAS CLAIMED TO BE BASED ON THE VALUATION OF THE PROPERTY OF THE APPELLANT COMPANY AT CALCUTTA BY THE REGISTERED VALUER. ACCORDINGLY, IN VIEW OF THE ABOVE FACTS AND CIRCUMS TANCES OF THE CASE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDERS OF THE AUTHORITIES BELOW QUA THIS ISSUE. 5. THE LD. A/R OF THE ASSESSEE HAS ALSO RAISED A PL EA THAT THE PROVISIONS OF SECTION 56(2)(VIIB) HAVE BEEN BROUGHT ON STATUTE BY FINANCE ACT, 2012 WITH EFFECT FROM 01.04.2013. HOWEVER, THE SUM OF RS. 41,32,60, 000/- HAVE BEEN RECEIVED BY THE ASSESSEE COMPANY DURING THE PERIOD 01.04.2011 T O 31 ST MARCH, 2012. THEREFORE, HE HAS CONTENDED THAT THE PROVISIONS OF SECTION 56( 2)(VIIB) CANNOT BE INVOKED ON THIS AMOUNT. WE NOTE THAT THIS PLEA WAS NOT TAKEN BY THE ASSESSEE EITHER BEFORE THE AO OR BEFORE THE LD. CIT (APPEALS) AND FURTHER THE ASSESSEE HAS NOT SOUGHT ANY LEAVE OF THIS TRIBUNAL TO RAISE THE ADDITIONAL GROU ND OR A NEW PLEA AT THIS STAGE. THEREFORE, TAKING A PLEA AT THE END OF THE HEARING OF THE MATTER CANNOT BE ACCEPTED WITHOUT FOLLOWING THE DUE PROCESS OF TAKING A LEAVE AND GIVING A PROPER OPPORTUNITY TO THE OTHER PARTY TO RESPOND TO SUCH A NEW PLEA TA KEN BY THE ASSESSEE AT THIS STAGE. EVEN OTHERWISE, IT IS NOT IN DISPUTE TH AT THE PROVISIONS OF SECTION 16 ITA NO. 895/JP/2017 M/S. SAHU MINERALS AND PROPERTIES LTD., JAIPUR. 56(2)(VIIB) ARE APPLICABLE FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. THEREFORE, WE DO NOT INCLINE TO ACCEPT THE PLEA RAISED BY THE ASSESSEE. THE SAME IS REJECTED. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 02/05/2 018. SD/- SD/- ( FOE FLAG ;KNO ) ( FOT; IKY JKWO (VIKRAM SINGH YADAV ) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 02 /05/2018. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- M/S. SAHU MINERALS AND PROPERTIES LTD., JAIPUR. 2. THE RESPONDENT THE ITO WARD 2(2), JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 895/JP/2017) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 17 ITA NO. 895/JP/2017 M/S. SAHU MINERALS AND PROPERTIES LTD., JAIPUR. 56. (1) INCOME OF EVERY KIND WHICH IS NOT TO BE EXCLUD ED FROM THE TOTAL INCOME UNDER THIS ACT SHALL BE CHARGEABLE TO INCOME-TAX UNDER TH E HEAD 'INCOME FROM OTHER SOURCES', IF IT IS NOT CHARGEABLE TO INCOME-TAX UNDER ANY OF THE HEADS SPECIFIED IN SECTION 14 , ITEMS A TO E. (2) IN PARTICULAR, AND WITHOUT PREJUDICE TO THE GEN ERALITY OF THE PROVISIONS OF SUB-SECTION (1), THE FOLLOWING INCOMES, SHALL BE CHARGEABLE TO INCOME-TAX UNDER THE HEAD 'INCOME FROM OTHER SOURCES', NAMELY :