https://www.taxtmi.com/caselaws?id=771291 ITAT Mumbai-AT allowed the assessee's appeal against addition under section 56(2)(viib) for excess share premium on Non-Cumulative Compulsory Convertible Preference Shares. The AO and CIT(A) had rejected the fair market value computed by an independent chartered accountant using the Discounted Cash Flow Method, claiming insufficient documentation and unverified projections. However, ITAT found the valuation report was adequately supported by projected cash flows, financial statements, and basis for divestment valuations. The surge in cash flows was properly explained as gains from proposed disinvestments. ITAT held that no infirmity was established in the DCF method beyond the explained cash flow surge, making the addition unjustified. en-us Tue, 06 May 2025 00:00:00 +0530 Fri, 23 May 2025 08:46:10 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=771291 ITAT Mumbai-AT allowed the assessee's appeal against addition under section 56(2)(viib) for excess share premium on Non-Cumulative Compulsory Convertible Preference Shares. The AO and CIT(A) had rejected the fair market value computed by an independent chartered accountant using the Discounted Cash Flow Method, claiming insufficient documentation and unverified projections. However, ITAT found the valuation report was adequately supported by projected cash flows, financial statements, and basis for divestment valuations. The surge in cash flows was properly explained as gains from proposed disinvestments. ITAT held that no infirmity was established in the DCF method beyond the explained cash flow surge, making the addition unjustified. Case-Laws Income Tax Tue, 06 May 2025 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=771291