#section 56(2)(viib)

The ITAT Pune has ruled that once an assessee selects either the Net Asset Value (NAV) or Discounted Cash Flow (DCF) method under Rule 11UA to determine the fair market value of unlisted shares, the Assessing Officer has no authority to substitute it with another valuation approach or question its realism. This reinforces taxpayer autonomy in valuation and curbs arbitrary tax additions, directly impacting startups, private equity deals, and closely held companies.

ITAT Mumbai holds that the 10% safe harbour limit under Section 56(2)(vii)(b) of the Income Tax Act applies retrospectively, setting aside an addition of Rs. 5,59,522 for AY 2017-18. The ruling clarifies that the assessee is liable only for the difference exceeding the 10% threshold between stamp duty value and actual consideration, reinforcing tax certainty for property transactions.

ITAT Delhi rules that Section 56(2)(viib) of the Income Tax Act applies only when consideration is received in the assessment year of share allotment. Funds received earlier via Compulsorily Convertible Debentures (CCD) conversion do not attract tax on share premium, even if valuation is based on prior balance sheets. The ruling clarifies the timing of receipt for tax applicability under this provision.

ITAT Mumbai rules that share premium received before Section 56(2)(viib) came into force (01/04/2013) cannot be taxed, even if shares are allotted later. The tribunal invalidates additions under Section 68 for lack of notice and procedural compliance, reinforcing that tax provisions cannot apply retrospectively to past transactions.