AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (6) TMI 1274
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....es to addition of Rs. 9,00,000/- u/s 68 of the Income Tax Act, 1961. 5. Ground No. 3 relates to enhancement of income by Rs. 70,50,000/- u/s 56(2)(viib). 6. Heard the arguments of both the parties and perused the material available on record. 7. The AO made addition of the entire share application money of Rs. 94,00,000/- u/s 68 of the Income Tax Act, 1961 based on the bank statements and lack of creditworthiness of the applicant parties. The AO treated entire receipt as bogus transaction and unexplained credit. The ld. CIT(A) held that the assessee has received Rs. 85,00,000/- in the earlier years and held that no addition u/s 68 called for in the current year. At the same time, the ld. CIT(A) held that an amount of Rs. 70,50,000/- be t....
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....td. vs. ITO 2018, 171/ITD/74 (Del). 10. We have gone through the facts on record and the judgment quoted by the revenue. The order in the case of Agro Portfolio Pvt. Ltd. vs. ITO (supra) is not applicable to the facts of this case. In the similar issue stands adjudicated by the order of the Tribunal in the case of ACIT Vs. M/s Gamma Pizzakraft (Overseas) Pvt. Ltd. in ITA No. 1309/Del/2020 vide order dated 12.05.2023. The relevant part is as under: "20. Whether the AO can change the method of valuation of unquoted shares under Rule 11UA of I.T. Rules 1962? 21. The provisions of Section 56 and Rule 11UA as under: "Income from other sources. 56. (1) Income of every kind which is not to be excluded from the total income under this Act ....
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.... of its assets, including intangible assets being goodwill, know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature, whichever is higher; (b) "venture capital company", "venture capital fund" and "venture capital undertaking" shall have the meanings respectively assigned to them in clause (a), clause (b) and clause (c) of Explanation to clause (23FB) of section 10;" 22. From the above, it is evident that the FMV of the unquoted share be the value as determined by the prescribed method or as substantiated by the assessee whichever is higher. The appellant has chosen to the first option i.e. value as per the prescribed method. The method of determining the FMV is given i....
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....ng provision for taxation, other than amount of tax paid as deduction or collection at source or as advance tax payment as reduced by the amount of tax claimed as refund under the Income-tax Act, to the extent of the excess over the tax payable with reference to the book profits in accordance with the law applicable thereto; (v) any amount representing provisions made for meeting liabilities, other than ascertained liabilities; (vi) any amount representing contingent liabilities other than arrears of dividends payable in respect of cumulative preference shares; PE ~ total amount of paid up equity share capital as shown in the balance-sheet; PV = the paid up value of such equity shares; or (b) the fair market value of the unquoted eq....
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....uer. The AO has not accepted this. It is noted here that there is merit in the AO's observation that the valuation report is very brief. However, in the absence of any prescribed format or size, one cannot reject the valuation merely on that ground. Further, the AO has not pointed out any specific deficiency in the Valuation Report itself Hence, it would be incorrect to reject the DCF method solely on that ground. Issue no. 4: 27. Whether DCF is the most appropriate method in the instant case as espoused by the appellant? 28. The appellant besides explaining DCF in detail has also submitted that DCF method is a scientific method of valuation of share duly recognized by professional and accounting bodies worldwide and also the ICAI. DC....