ITAT Restricts Substitution Where Actual Consideration Exceeds Rule 11UA FMV

Hon’ble Mumbai Tribunal holds that where the sale consideration for unquoted shares exceeds the Rule 11UA FMV, the AO cannot substitute the actual consideration with a higher value derived from asubsequent independent strategic transaction.

BACKGROUND

• Shri Bharat Vinod Daftary ('Assessee'), held a substantial equity shareholding in Bharat Serums and Vaccines Limited ('BSVL'), an unlisted company. Following his death on 7 December 2023, his legal heir, Smt. Bhavna Bharat Daftary, was substituted in the appellate proceedings. 
• Thekeyissuebeforethe ITATwaswhether,in the absenceofanapplicable statutory deeming provision, the Assessing Officer (‘AO’) could replace the actual consideration of an earlier completed transfer of unquoted shares with the price arising from asubsequent and independent transaction.