IN THE INCOME-TAX APPELLATE TRIBUNAL “C” BENCH, MUMBAI BEFORE SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER &

SMT. RENU JAUHRI, ACCOUNTANT MEMBER आयकर अपील सं./ITA No. 867/MUM/2025 (निर्धारण वर्ा / Assessment Year: 2017-18)

Ideaforge Technology v/s. Assistant Commissioner Ltd. बिधम of Income Tax, Circle EL-146, TTC Industrial 15(2)(1), Mumbai Area, Electronic Zone, Room NO. 357, 3^rd Floor, MIDC, Mahape, Navi Aayakar Bhavan, Maharshi Mumbai Karve Road, Mumbai

400020 स्थधयी लेखध सं./जीआइआर सं./PAN/GIR No: AABCI6495B Appellant/अपीलधथी .. Respondent/

निर्धाररिी की ओर से /Assessee by: Shri Subodh Ratnaparkhi रधजस्व की ओर से /Revenue by: Shri. Leyaqat Ali Aafaqui (SR DR)

सुिवधई की िधरीख / Date of Hearing 22.08.2025 घोर्णध की िधरीख/Date of Pronouncement 26.09.2025 आदेश / O R D E R PER RENU JAUHRI [A.M.] :-

This appeal is filed by the assessee against the order of the National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 11.12.2024, passed u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for Assessment Year [A.Y.] 2017-18.

2. The assessee has raised the following grounds of appeal:

“On the facts and in law, 1. The Hon. CIT(A) erred in upholding the action of the Id AO in making addition of Rs. 6,60,02,100/- by relying upon the provisions of section 56(2)(viib) of the IT Act, 1961 on the ground that the consideration received by the appellant for issue of unquoted shares exceeded the fair market value of such shares, disregarding the valuation as per Discounted Cash Flow (DCF) Method adopted by the appellant by relying upon Rule 11UA(2)(b) but instead applying Net Asset Value (NAV) method, which being not justified, the addition of Rs.6,60,02,100/- may kindly be deleted.

2. The Hon. CIT(A) erred in in upholding the action of the Id AO in making addition of Rs. 6,60,02,100/- under s. 56(2)(viib) of the IT Act, 1961, not appreciating that as per section 56(2)(viib) r.w. Rule 11UA(2)(b), the choice of adopting a valuation method lies with the assessee and not with the Id AO and therefore the addition of Rs.6,60,02,100/- made by the Id AO by replacing the validly adopted method of valuation, is unjustified and may kindly be deleted.

3.The appellant craves leave to add, alter, amend and/or vary the above grounds of appeal at any time before the decision of the appeal.”

3. Brief facts of the case are that the return of income for A.Y. 2017- 18 was filed by the assessee on 29.03.2019 declaring total income of Rs.4,45,96,930/-. In the assessment order passed u/s 143(3), ld. AO made an addition of Rs.6,60,02,100/- u/s. 56(2)(viIb) of the Act, holding that the 4700 equity shares issued by the assessee to third party share holders @ Rs. 16491/- have been over valued by a sum of Rs.14043.90 (per share), thereby resulting in addition of Rs. 6,60,02,100/- (4700 shares x Rs. 14043.90). The difference in premium value during the year is as per the chart below:

Against the order of Ld. Assessing Officer, the assessee preferred an appeal before ld. CIT(A) who has upheld the addition vide order dated

11.12.2024. aggrieved with the order of ld. CIT(A), the assessee has filed appeal before the Tribunal.

4. Before us, Ld. AR has argued that the assessee in the year under consideration was a private limited company engaged in the business of manufacture and sale of Drones [Unmanned Aerial Vehicle - (UAV)]. The assessee company was established in 2007 by promoters who were graduates from IIT, Bombay and inoculated at IIT Bombay. It is a global technology leader in the Vertical Take-off and Landing (VTOL), Micro and Mini Unmanned Aerial Vehicle (UAV) space. The assessee’s clients include Defence and Internal Security agencies, as well as Government bodies which procure and deploy UAVs in their operations. The assessee company has technically collaborated with DRDO to create NETRA, an air borne early warning system. The appellant has introduced UAVs in the industrial segment also, delivering drone-based solutions for industries involved in ag