Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2023 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (1) TMI 669 - AT - Income TaxAddition u/s. 56(2) (viib) - AO had rejected the valuation of shares as per discounted cash flow method applied by the assessee on the grounds of being unfounded and not supported by any substantive facts - CIT(A) while deleting the addition made by AO has given a finding that the reply of the assessee and the fair market value based on DCF valuation given by the assessee was rejected without any cogent material on record - HELD THAT:- As noted that as per the provision of section 56(2) (viib) the fair market value shall be as per value determined in accordance with the method prescribed or as substantiated by the company based on the value of share goodwill etc. whichever is higher. He has further noted that it is at the option of the assessee to choose between the value determined on the basis of formula prescribed for determining the fair market value of the unquoted share as per rule 11UA or the Fair Market Value worked out by the merchant banker as per discounted free cash flow method. He given a finding that the assessee has opted for working of fair market value of the shares which was duly supported by the report of Chartered Accountant/valuer. AO has not brought on record any material on record to counter the submissions made by the assessee - working of fair market value by AO at Rs. 340.22 per share on the basis of the book value disregarding the market value, to be not in accordance with law. Before us no fallacy in the findings of the CIT(A) has been pointed out by Revenue. In such a situation, we find no reason interfere with the order of CIT(A), and thus the ground of Revenue dismissed.
|