https://www.taxtmi.com/caselaws?id=751266 The ITAT Bangalore ruled in favor of the assessee in a case involving addition under section 56(2)(viib) for shares issued above fair market value. The AO had rejected the independent valuer's DCF method valuation of Rs. 185.92 per share and substituted it with Rs. 36.76 per share. The ITAT held that the AO lacks power to substitute valuations done by qualified valuers under Rule 11U. The Tribunal emphasized that DCF methodology involves future projections based on various factors and cannot be evaluated with arithmetical precision. Following precedent from Cinestaan Entertainment P. Ltd., the ITAT confirmed that when law permits valuation by prescribed experts using prescribed methods, the AO cannot reject such valuations. en-us Wed, 24 Jan 2024 00:00:00 +0530 Fri, 12 Apr 2024 08:50:42 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=751266 The ITAT Bangalore ruled in favor of the assessee in a case involving addition under section 56(2)(viib) for shares issued above fair market value. The AO had rejected the independent valuer's DCF method valuation of Rs. 185.92 per share and substituted it with Rs. 36.76 per share. The ITAT held that the AO lacks power to substitute valuations done by qualified valuers under Rule 11U. The Tribunal emphasized that DCF methodology involves future projections based on various factors and cannot be evaluated with arithmetical precision. Following precedent from Cinestaan Entertainment P. Ltd., the ITAT confirmed that when law permits valuation by prescribed experts using prescribed methods, the AO cannot reject such valuations. Case-Laws Income Tax Wed, 24 Jan 2024 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=751266