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2023 (7) TMI 403 - AT - Income TaxAddition u/s 56(2)(viib) - issue of shares at premium - Determination of fair market value - DCF v/s NAV method of valuation of shares - unverified data supplied by assessee - DCF method was rejected by the AO after finding discrepancies in the basis of valuation adopting different method of calculation of share in the Fair Market Value - HELD THAT:- The assessee has obtained the method for DCF for as calculating the FMV of share. In assessment order without finding any lacuna, the ld. AO has changed the method from DCF to NAV. The very purpose of certification of DCF valuation by a merchant banker or chartered accountant is to ensure that the valuation is fair and reasonable. Such valuation is to be done by an expert of the subject only, which an assessing officer is not expected to be. The said rule provides that such valuation shall be the fair market value for the purpose of this section based on DCF Method. The Rule nowhere permits the AO to make any adjustment therein. AO has rejected the DCF method due to unverified data supplied assessee. But the impugned order is not coming under same factual matrix of the case Agro Portfolio Private Ltd [2018 (5) TMI 1088 - ITAT DELHI] - AO was not able to establish about any dispute about the correctness of data as supplied by the assessee to merchant banker. The ld. AO had not taken any technical support related to valuation of the share of assessee in impugned assessment year. The data in valuation is basis of projection which was calculated by the Merchant Banker/ Chartered Accountant. The change of method of valuation is not in accordance with the relevant provisions of the Act and the Rules stated above. Accordingly, we uphold the findings of the ld. CIT(A) and set aside the addition made by the ld. AO. Accordingly, grounds taken by the revenue in this respect are dismissed.
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