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2020 (10) TMI 1083 - AT - Income TaxViolation of Rule 46A - CIT(Appeals) non affording opportunity to the AO - Income from other sources - permitted method of valuation - assessee is a domestic company engaged in the business of internet services and infrastructure management services and assessee issued 19500 shares and received share premium - CIT(Appeals) deleted the addition made by the AO - HELD THAT:- As agreed by both the parties that there was a violation of Rule 46A of the Income Tax Rules, 1962 (Rules), in as much as the CIT(A) did not confront the material that was placed before him to substantiate the valuation under the DCF method adopted by the Assessee in its report of valuation. The ld. counsel for the assessee, however, submitted that what was filed before the CIT(Appeals) was only financial statements to substantiate the valuation as made by the assessee. In our view, when the basis of conclusion of CIT(Appeals) is the financial statements filed by the assessee before him, it was incumbent upon the CIT(A) to have confronted the material filed before him to the AO in accordance with the mandate of Rule 46A of the I.T. Rules, 1962. Since there is a violation of Rule 46A of the Rules, the issue should be remanded back to the CIT(Appeals) for fresh consideration after affording opportunity to the AO. - Decided in favour of revenue for statistical purposes.
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