Assessee uses Rule 11UA(2) for DCF valuation; AO can't challenge recognized methods. Fairness ensured by certification.

Assessee uses Rule 11UA(2) for DCF valuation; AO can't challenge recognized methods. Fairness ensured by certification. https://www.taxtmi.com/highlights?id=59721 Additions u/s 56(2)(viib) - it is not denied that the assessee adopted clause (b) of Rule 11UA(2) of the Rules and accordingly obtained a Valuation Report from a Chartered Accountant. Since the law has prescribed the specific method for valuation i.e Discounted Cash Flow Method (hereinafter also referred as "DCF"), so he was free (and rather entitled) to choose this method. The method of valuation could be challenged by the AO only if it was not a recognized method of valuation (as per Rule 11UA (2) of the Rules).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. - AT en-us Fri, 17 Sep 2021 14:12:44 +0530 Fri, 17 Sep 2021 14:12:44 +0530 TaxTMI RSS Generator Assessee uses Rule 11UA(2) for DCF valuation; AO can't challenge recognized methods. Fairness ensured by certification. https://www.taxtmi.com/highlights?id=59721 Additions u/s 56(2)(viib) - it is not denied that the assessee adopted clause (b) of Rule 11UA(2) of the Rules and accordingly obtained a Valuation Report from a Chartered Accountant. Since the law has prescribed the specific method for valuation i.e Discounted Cash Flow Method (hereinafter also referred as "DCF"), so he was free (and rather entitled) to choose this method. The method of valuation could be challenged by the AO only if it was not a recognized method of valuation (as per Rule 11UA (2) of the Rules).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. - AT Highlights Income Tax Fri, 17 Sep 2021 14:12:44 +0530 https://www.taxtmi.com/highlights?id=59721