M/s Sahsralingeshwara Power Pvt Ltd , Bangalore V. Income Tax Officer, Ward-6(1)(1), Bangalore

SA 119/BANG/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5938 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 01-05-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 28-03-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NILANJAN DEY J
• Assessee Lawyers: S RAMASUBRAMANYAM
• Keywords: Application of stay; Fair market value
• Section: 56

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, B ENGALURU BEFORE S HRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER SP NO. 119 /BANG/201 8 (IN I TA NO. 922 / BANG/2 0 1 8 ) (ASSESSMENT YEAR: 20 10 - 11 ) M/S.SAHASRALINGESHWARA POWER PVT. LTD. NO.37, RMJ MANDOTH TOWER, 7 TH CROSS,VASANTHNAGAR, BENGALURU - 560052. VS. PETITIONER INCOME - TAX OFFICER, WARD 6(1)(1), BENGALURU RESPONDENT PETITI O NER BY : SHRI S.RAMASUBRAMANYAM, CA. RESPONDENT BY : SHRI NILANJAN DEY, JCIT(DR) DATE OF HEARING : 2 0 /0 4 /2018 DATE OF PRONOUNCEMENT : 20 / 0 4 /201 8 O R D E R PER I NTURI RAMA RAO, AM : THIS PETITION IS FILED BY THE ASSESSEE SEEKING STAY OF DEMAND OF RS.5,32,41,500/ - FOR THE ASSESSMENT YEAR 2013 - 14. LEARNED AR OF THE ASSESSEE SUBMITTED THAT THE DEMAND IN QUESTION HAD ARISEN ON ACCOUNT OF MAKING ADDITION OF SHARE PREMIUM RECEIVED UNDER CLAUSE (VIIB) OF SUB - SECTION (2) OF SECTION 56 OF THE INCOME - TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT' FOR SHORT] ON THE GROUN D THAT CONSIDERATION RECEIVED FOR ISSUE OF SHARES EXCEEDS MARKET VALUE OF THE SHARES. IT IS SUBMITTED THAT SHARE PREMIUM RECEIVED IS IN ACCORDANCE WITH CERTIFICATE OF VALUATION GIVEN BY CHARTERED ACCOUNTANT , FOLLOWING DCF METHOD, WHICH IS ONE OF THE PRESC RIBED METHOD S UNDER RULE 11UA(2)(D) OF THE IT RULES. IT IS SUBMITTED THAT FAIR MARKET VALUE OF SHARES WAS ARRIVED AT RS.800 BASED ON DISCOUNTED CASH FLOW METHOD OF VALUATION. ASSESSING OFFICER (AO) HELD THAT THIS METHOD IS NOT PRESCRIBED IN THE STATUTE FO R THE YEAR UNDER CONSIDERATION. IT IS ONLY W .E.F. ASSESSMENT YEAR 2013 - 14 . THIS SP NO . 119 /BANG/201 8 PAGE 2 OF 2 METHOD CAN BE APPLIED AND THEREFORE, MADE ADDITION OF THE ENTIRE SHARE PREMIUM RECEIVED. LEARNED AR OF THE ASSESSEE FURTHER SUBMITTED THAT THE ASSESSEE CANNOT AFFORD TO PAY DISPUTED TAX DEMAND AS THERE ARE NO LIQUID FUNDS WITH THE ASSESSEE - COMPANY AS IT IS PROCESS OF SETTING UP OF BUSINESS. ON THE OTHER HAND, LEARNED DEPARTMENTAL REPRESENTATIVE OPPOSED THE STAY PETITION. 2. WE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN APPEAL REQUIRES THOROUGH EXAMINATION OF THE METHOD ADOPTED BY THE ASSESSEE AS WELL AS THE AO. THEREFORE, IT CANNOT BE SAID THAT THERE IS ANY STRONG PRIMA FACIE CASE IN FAVOUR OF THE ASSESSEE - COMPANY. HENCE, IN OUR CONSIDERED OPI NION, IT IS NOT A FIT CASE FOR STAY OF DEMAND. ACCORDINGLY, THE STAY PETITION FILED BY THE ASSESSEE IS REJECTED. HOWEVER, WE DIRECT REGISTRY TO POST THE CASE FOR HEARING OUT - OF - TURN ON 0 2/05/2018. 3. IN THE RESULT, THE STAY PETITION IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH APRIL , 2018 S D/ - SD/ - ( SUNIL KUMAR YADAV ) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE : BENGALURU. D A T E D : 20 / 0 4 /201 8 SRINIVASULU, SPS COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A) 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY INCOME - TAX APPELLATE TRIBUNA L BANGALORE