Functional comparability under TNMM supported exclusion of ITeS comparables with R&D, intangibles, diversified operations, or unavailable segmental da...
ITAT dismissed the Revenue's appeal and upheld the CIT(A)'s deletion of the addition under s.56(2)(viib), holding that valuation by DCF is a technical exercise to be respected absent proof of perversity or mala fides. The Revenue failed to adduce material demonstrating that the assessee's DCF inputs were inherently manipulated; subsequent variance between projections and actuals alone did not render the valuation unreliable. The tribunal noted shares were issued to existing group entities with no challenge to their identity or creditworthiness and that s.56(2)(viib) targets colourable inflows. AO erred in substituting NAV for DCF based solely on later divergence, so the addition was disallowed.
ITAT dismissed the Revenue's appeal and upheld the CIT(A)'s deletion of the addition under s.56(2)(viib), holding that valuation by DCF is a technical exercise to be respected absent proof of perversity or mala fides. The Revenue failed to adduce material demonstrating that the assessee's DCF inputs were inherently manipulated; subsequent variance between projections and actuals alone did not render the valuation unreliable. The tribunal noted shares were issued to existing group entities with no challenge to their identity or creditworthiness and that s.56(2)(viib) targets colourable inflows. AO erred in substituting NAV for DCF based solely on later divergence, so the addition was disallowed.
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