Sec. 56(2)(viia) of Income Tax act, 1961 — Income from other sources — The assessee filed the appeal before ITAT against the order of CIT(A) of confirming the addition made by ITO in the sum of Rs. 107,40,00,000/- u/s 56(2)(viia) of the Act. ITO observed that there was huge variation in the projection made for the DCF method  and rejected the valuation of shares carried out by an independent valuer using DCF method and proceeded to adopt the book value of shares as per the provisions of Rule 11UA(2)(a) of the Income Tax Rules. ITAT held that:- the provisions of section 56(2)(viia) of the Act cannot apply to a foreign company as the relevant Rule 11U which defines 'balance sheet' was not applicable to a foreign company. The amendment in this regard was brought in Rule 11U with effect from 1.4.19 under Rule 11U(b)(ii) of the Rules. This amendment is only prospective in nature and cannot apply to the year under appeal. Hence appeal of the assesse allowed directing the AO to delete the addition made in the sum of Rs. 107,40,00,000/- u/s 56(2)(viia) of the Act. — KEVA INDUSTRIES (P) LTD. Vs. ITO [2020] 203 TTJ 672 (ITAT-MUMABI)