Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2020 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (12) TMI 1062 - AT - Income TaxAddition u/s 56(2)(viib) - Appellant has received consideration in excess of fair market value of shares - valuation technique adopted by the valuer - Whether AO was justified in rejecting DCF method followed by the assessee? - HELD THAT:- As relying on VBHC Value Homes Pvt. Limited [2020 (6) TMI 318 - ITAT BANGALORE] - We are of the opinion that the action of Ld. AO in rejecting use of DCF method is not proper. We also find considerable merit in the argument advanced by Ld. AR that the under DCF, the information to be considered should be as on date of valuation. In the instant case, Ld. AO has erred in comparing estimated projections with the actual audited revenues. See M/S. INNOVITI PAYMENT SOLUTIONS PVT. LTD. [2019 (1) TMI 688 - ITAT BANGALORE] We do not approve the approach and the findings of either Ld AO or Ld CIT(A). The decisions relied upon by Ld CIT(DR) are also not relevant. In case of Agro Portfolio [2018 (5) TMI 1088 - ITAT DELHI] it was a case of ex-parte assessment. AO directed the appellant to furnish material in support of is valuation applying DCF. In reply there was no compliance by the assessee and therefore left with no other alternative AO completed assessment u/s. 144 applying NAV method. In the present case, as noted by us above, the appellant has not only participated during assessment but also categorically highlighted the errors in factual findings of the Ld AO. In this case the assessee filed a writ before Hon'ble High Court challenging jurisdiction of AO. Decision of Hon'ble Kerala High Court has also been considered in case of VBHC Value (supra). We set aside the matter back to the records of Ld AO for a de novo examination of DCF Valuation adopted by the appellant as per law. The Ld. AO is directed to re-examine the matter afresh.
|