Section 56 of Income Tax Act, 1961—This appeal filed by the assessee is directed against the order passed by CIT(A).

In the instant case, has allotted 70 lac equity shares of Rs. 10 each at a premium of Rs. 5 per share and has received premium of Rs. 3.5 crores. We find the Assessing Officer, invoking the provisions of section 56(2)(viib), made addition of Rs. 3,50,00,000/- on the ground that the fair market value of shares comes to Rs. 6.65 per share as per the book value. We find the ld.CIT(A) computed the fair market value of the shares at Rs. 10.05 per share and gave part relief of Rs. 3,50,000/- and sustained the addition of Rs. 3,46,50,000/- the reasons for which has been reproduced in the preceding paragraphs.

Held that—We, therefore, find merit in the argument of the ld. counsel for the assessee that the valuation of the shares should be made on the basis of various factors and not merely on the basis of financials and the substantiation of the fair market value on the basis of the valuation done by the assessee simply cannot be rejected where the assessee has demonstrated with evidence that the fair market value of the asset is much more than the value shown in the balance sheet. The order of the CIT(A) is accordingly set aside and the grounds raised by the assessee are allowed.[M/S INDIA CONVENTION AND CULTURE CENTRE PVT. LTD. VERSUS ITO, WARD-12 (2) , NEW DELHI.] [2019] 17 ITCD Online (48) [ITAT DELHI]