Assessee M/s. Saahas Waste Management Private Limited, Bangalore The Deputy Commissioner Of Income Tax, Circle- 6(1)(1), Bangalore

IN THE INCOME TAX APPELLATE TRIBUNAL
“B’’BENCH: BANGALORE
BEFORE SHRI GEORGE GEORGE K., JUDICIAL
MEMBERAND
SHRI B.R. BASKARAN, ACCOUNTANT MEMBER
ITA No.1881/Bang/2019
AssessmentYear:2016-17

M/s. Saahas Waste Management (P)
Ltd.
No.21, 5th ‘C’ Cross, 16th Main
BTM 2nd Stage
Bangalore-560 076
PAN NO : AATCS5284J
APPELLANT 

Vs.

Deputy Commissioner of
Income-tax
Circle-6(1)(1)
Bangalore
RESPONDENT

Appellant by : Shri H.V. Goutham, A.R.
Respondent by : Shri Priyadarshi Mishra, D.R.
Date of Hearing : 03.11.2020
Date of Pronouncement : 01.12.2020
O R D E R

PER B.R. BASKARAN, ACCOUNTANT MEMBER:

The assessee has filed this appeal challenging the order passed by the Ld. CIT(A) confirming the addition made by the A.O. u/s 56(2)(viib) of the Income-tax Act,1961 ['the Act' for short] amounting to Rs.85,20,036/- for assessment year 2016-17.

2. We heard the parties and perused the record. During the year under consideration, the assessee had issued 2643 nos. of preference shares having a face value of Rs.2,225/- each at a premium of Rs.3,874.42 per preference share. Accordingly, the assessee had collected share premium of Rs.1,02,40,092/-. The A.O. noticed that the assessee has followed Discounted Cash Flowmethod (DCF) for valuing shares and accordingly, substantiated the share premium collected by it. The A.O. however, rejected the same and computed the value of share by adopting net asset value method. The A.O. noticed that the net asset value was negative at (-)Rs.15,520/-. Accordingly, the A.O. took the view that the entire share premium of Rs.3,874.42 collected by the assessee is liable for tax u/s 56(2)(viib) of the Act. The A.O. noticed that the assessee has issued shares to both residents and non-residents. The number of shares issued to residents was 2199 preference shares. Accordingly, the share premium collected from resident share holders was Rs.85,20,036/-, which was liable for taxation u/s 56(2)(viib) of the Act. Accordingly, the A.O. assessed the above said amount as income of the assessee u/s 56(2)(viib) of the Act. The Ld. CIT(A) also confirmed the same and hence, the assessee has filed this appeal before us.

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