Rule 11UA Allows 10% Tolerance Limit for Differences Between Issue Price and FMV, No Additions Required u/s 56(2)(viib): ITAT

The ITAT clarified that under Rule 11UA, a 10% tolerance limit is allowed for differences between the issue price and Fair Market Value (FMV) of shares. The ruling dismissed the tax authority's claim for additional taxation under Section 56(2)(viib) and stated that as long as the variation between the issue price and FMV is within 10%, no additions are required. This decision is significant for startups and companies issuing shares at a premium, providing them with clarity on valuation norms.