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2019 (3) TMI 158 - AT - Income TaxAddition of share premium u/s 56(2)(viib) r.w.r. 114A(2)(a) - valuation adopted by the assessee using the DCF Method - HELD THAT:- The assessee contention that the AO has taken the lower of the valuation, whereas he is required to adopt the higher valuation is not correct. The valuation adopted by the assessee using the DCF Method has not withstood the scrutiny of the AO. The assessee has not been able / failed to furnish the details that went into and formed the basis for the projections made by the assessee. As pointed out by the CIT(A), there is absolutely no correlation between the figures adopted by the assessee in its projections and the actual figures reported. Since the very basis for the DCF valuation was itself not substantiated by the assessee, the AO has adopted the NAV Method to determine the valuation. In the case of Agro Portfolio Pvt. Ltd. [2018 (5) TMI 1088 - ITAT DELHI] are similar to that of the assessee in the case on hand and we are of the considered view that the findings rendered therein are applicable to the present case before us. We uphold the action of the AO in determining the share premium collected in the assessee’s hand u/s 56(2)(viib) r.w.r. 114A(2)(a) of the Rules and the action of the CIT(A) in upholding the AO’s action / addition. Grounds of assessee’s appeal are dismissed. Claim for write off of bad debts - HELD THAT:- CIT(A) rendered a finding that these amounts are expended towards advertisement expenses incurred for and on behalf of the franchisees, which was to be reimbursed by them to the assessee. The assessee’s explanations that the franchisees were unable to reimburse the aforesaid expenses incurred by the assessee on their behalf due to insufficient / tight cash flow position and therefore the same has to be written off as advertisement expenses; in the view of the CIT(A); does not qualify to be “Revenue” to be written off as bad debts. We find that the findings rendered by the CIT(A) has not been controverted by the assessee before us. No further documents / details were furnished by the assessee. In this factual matrix of the case, as discussed above, we uphold the action of the factual findings rendered by the authorities below in disallowing the assessee’s claim for write off of reimbursable “advertisement expenses” incurred by the assessee as bad debts.
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