Share Price Derived As Per Rule 11UA Prevails Over Third Party Transaction Price

BACKGROUND

• During AY 2021-22, the Assessee¹ purchased 5.92 Cr. shares of IG3 Infra Limited ('IG3') at INR 12.43 per share and 18.43 Cr. shares of ETL Power Services Limited ('ETL') at the price of INR 14.30 per share on 08.08.2020. Both these shares were purchased from Green Grid Group Pte Ltd., Singapore ('Green Grid').
• The case was selected for scrutiny and notice u/s 143(2) of the Income Tax Act, 1961 ('the Act') was issued.
• Assessee furnished two valuation reports as per Rule 11UA of the Income-tax Rules, 1962 ('Rules') dated 06.07.2020 and 09.12.2022 based on unaudited balance sheet and audited balance sheet respectively.
• Contention of Assessing Officer('AO'):
  1. AO treated the Assessee's share acquisition from Green Grid as an international transaction between associated enterprises and referred it to the TPO. The TPO determined the arm's length price ('ALP') of IG3 shares at INR 29.48 per share based on a comparable third-party transaction.