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2022 (12) TMI 1311 - AT - Income TaxAddition u/s. 56(2)(viib) - rejecting the valuation of shares adopted by the Appellant viz., Cash flow method for issuance of shares for the AY 2015-16 - CIT(A) concurred with the stand of Ld. AO that DCF valuation was not reliable since future cash flows were exaggerated and not supported by any corroborating documentation - HELD THAT:- We are of the considered opinion that though DCF valuation is one of the prescribed methods, however, the valuation should be based on reasonable estimations and assumptions which is missing in the present case. As noted by lower authorities, the valuer has merely adopted the projections made by the management and there was substantial difference in cash flow projections in both the valuation reports itself. The valuation could not be substantiated by the assessee. We also concur that only excess premium exceeding face value of shares could be brought to tax u/s 56(2)(viib). Therefore, the adjudication as done by Ld. CIT(A) in the impugned order could not be faulted with. We order so.
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