Historical Angel Tax Scrutiny in Andaman and Nicobar Islands

Section 56(2)(viib) Practice Considerations in Andaman and Nicobar Islands

For startups and closely held companies in Andaman and Nicobar Islands, the Section 56(2)(viib) computation under Rule 11UA(2) interlocks with three local touchpoints: assessing-officer charge under ITAT Kolkata appellate jurisdiction, AD-bank reporting under SBI Port Blair is the principal AD-I; complex FEMA filings funnel via Kolkata or Chennai, and the FEMA pricing regime where any non-resident subscriber is on the cap table. Stamp duty on the underlying allotment instruments follows the Andaman and Nicobar Islands schedule — Indian Stamp Act applies (no separate UT schedule) — which adds up materially on large authorised-capital rounds.

The economic mix of Andaman and Nicobar Islands runs across tourism, small-scale agro-processing, fisheries — sectors that consistently dominate the regulatory case-load and the profile of the engagements we field from this jurisdiction. There is no notified SEZ in the state. On the AD-Bank side, SBI Port Blair is the principal AD-I; complex FEMA filings funnel via Kolkata or Chennai.

A&N enjoys 100% income-tax exemption for indigenous-tribal members under Section 10(26AAA) and is the only Indian UT astride the strategic Malacca Strait shipping route — a niche advantage for marine-services ventures.

Choice of Valuation Method — Andaman and Nicobar Islands Sector Context

The DCF methodology is almost always the operationally correct choice for early-stage and growth companies in Andaman and Nicobar Islands's dominant sectors — particularly where the underlying business is not yet profitable but has identifiable revenue ramp. For companies in heavy-asset sectors prevalent in Andaman and Nicobar Islands (e.g. fisheries), an NAV cross-check is essential because the DCF and NAV will diverge, and the assessing officer typically anchors on whichever lower figure supports a Section 56(2)(viib) addition.

Recent Assessment Patterns under ITAT Kolkata

From our practice across ITAT Kolkata appeals, the most common reasons that 56(2)(viib) additions are made — and either survived or struck down on appeal — are: (a) inadequate documentation of the projected cash-flow assumptions (Income Tax Officer challenge under Rule 11UA(2)(b) explanation); (b) absence of comparable-company cross-check in the valuation report (a soft requirement under best-practice but heavily relied on by CIT(A)); (c) cap-table inconsistency with the FC-GPR filing where a non-resident is on the round — this triggers parallel FEMA enquiry and erodes the 56(2)(viib) defence. We standardise our valuation reports to address all three explicitly.

FEMA Pricing Interaction for Andaman and Nicobar Islands Cap Tables with Non-Residents

Where the round includes a non-resident subscriber, the NDI Rules, 2019 (Rule 21) require the issue price to be at or above the fair value determined under any internationally accepted pricing method and certified by a Chartered Accountant, a SEBI-registered Merchant Banker or a practising Cost Accountant — and the FC-GPR filing within 30 days of allotment must reference the supporting valuation. For Andaman and Nicobar Islands-based companies, the AD-bank channel becomes the operational reporting loop: typically SBI Port Blair is the principal AD-I. The Rule 11UA(2) report and the FEMA pricing certificate must be internally consistent — divergence between the two is a frequent ITAT/HC observation.

Engagement — Andaman and Nicobar Islands Coverage

Section 56(2)(viib) valuation reports we issue for Andaman and Nicobar Islands-based companies include: scope-and-purpose memo, valuation date, Rule 11UA(2) DCF computation with explicit terminal-value sensitivity, NAV cross-check, comparable-company benchmark, FEMA-pricing reconciliation where applicable, and an audit-defence appendix mapping each assumption to contemporaneous documentation. Reports are signed under IBBI Registered Valuer credentials (IBBI/RV/03/2019/12333) where required by statute, and supported through assessment, CIT(A), and ITAT proceedings under ITAT Kolkata. Free 30-minute consultation: +91 99622 60333.

Andaman & Nicobar Islands: compliance facts for section 56 2 viib valuation report

The Andaman and Nicobar Islands have a tourism, fisheries and government-services economy centred on Port Blair, with special incentives for island industries and a small base of hospitality and shipping companies. Company matters are routed through Chennai and Kolkata: the Calcutta High Court's Port Blair circuit bench hears writs, and NCLT and ITAT matters go to Kolkata. For section 56 2 viib valuation report this means the company’s filings go to ROC Chennai and tribunal matters to NCLT Kolkata; where a non-resident invests, the price is also checked against the FEMA pricing rules.

Which authorities handle section 56 2 viib valuation report for a business in Andaman & Nicobar Islands?

Andaman & Nicobar Islands companies file with ROC Chennai; writ remedies lie before the Calcutta High Court (Port Blair Circuit Bench); company-law and insolvency matters go to the NCLT Kolkata.

Statutory references for this service are on the national section 56 2 viib valuation report page: https://virtualauditor.in/section-562viib-valuation-report

Checked 2026-10-14 against MCA · NCLT · CBIC · ITAT.

Virtual Auditor across India

• Section 56 2 viib Valuation Report — all India
• All service locations

What has changed in the law — reviewed October 2026

• Income-tax Act, 2025 is in force from 1 April 2026; the section numbers on this page are those of the Income-tax Act, 1961, which continues to govern assessment years up to 2026-27.

Full note on the national page.