Discounted cash flow valuation of equity shares and compulsorily...

Discounted cash flow valuation of equity shares and compulsorily convertible preference shares must be assessed as at the valuation date; subsequent actual cash flows, initial operating losses, or absence of positive cash flows do not alone invalidate projections. Substitution of the discounted cash flow method with net asset value valuation was therefore inappropriate, and the share-premium addition was deleted. Vendor-confirmation differences did not justify treating recorded business expenses as unexplained where audited books recorded the transactions, payments passed through banking channels, and business operations funded the expenditure; the unexplained-expenditure addition was deleted. Penalty-initiation challenges were premature because penalty proceedings remain separate from assessment proceedings.