TaxTMI 
TaxTMI 
2023 (12) TMI 702
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....essment order do not indicate any case of tax abuse involved in such share conversion. 3. The Ld CIT (A) erred in deleting the addition as the DCF (Discounted Cash Flow) valuation used by the assessee was done with fictitious figures having no correlation with actual affairs of the assessee company. 2. The brief facts of the case are that the assessee is an Indian company engaged in the business of generation and distribution of electricity and owns a Hydro Electric Project in Chanju, Himachal Pradesh; that for the relevant year, the assessee filed return of income on 18.10.2018 under section 139(1) of the Income tax Act, 1961 (in short 'the Act') declaring loss of Rs. 67,15,30,280/-; that the assessment in the case of the assessee was completed vide order dated 12.04.2021 passed under section 143(3) read with sections 143(3A) & 143(3B) assessing total income of the assessee at Rs. 135,36,85,457/- after making addition of Rs. 202,50,00,000/- u/s 56(2)(viib) of the Act, alleging that the assessee had issued equity shares at a premium which is in excess of the fair market value of shares. On appeal, the CIT(A) deleted the addition made by the assessing officer. Ag....
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....further contended that there is no increase in projected production capacity as block of fixed assets "remains at Rs. 631.20 Cr. from F.Y. 2017-18 To "F.Y. 2028-29 therefore, the scale of business of company is constant throughout the projected tenure. 6. The ld. DR has further contended that Rule 11U and 11UA of the Rules give the assessee a choice to adopt any method between (A-L)*PV/PE method or DCF method; that there is no dispute as to the suitability of DCF method for determination of value of shares as the same is approved as a valid method of valuation by the Act and the Rule; that it is a matter of fact that the DCF uses estimation of future cash flows. While genuine estimation can certainly qualify as a valid valuation, note needs to be taken of imaginary and fictitious estimation having no correlation with actual affairs of the assessee for arriving at premeditated figures of share value. The Act presumes that the DCF has been done bona fide. DCF takes into account estimation. It goes without saying that such estimation cannot be a fictitious figure invented and coined only to arrive at a premeditated figure of share value; that the assessee has arrived at a value of ....
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....n this regard, reliance is placed on Hon'ble Supreme Court's decision In the case of McDowell and Co. Ltd. [1985] 154 ITR 148. As regards the decisions quoted by the assessee to justify that AO cannot preclude the assessee from adopting the valuation method of its choice, it is stated that this is a undecided legal issue which has not attained finality. Therefore, in absence of valid arguments by the assessee to justify the valuation adopted by it for issuing equity shares at a premium, AO is not bound to accept the valuation offered by assessee. 10. The ld. DR has, submitted that therefore, the order of the ld. CIT(A) having been wrongly passed, the same be set aside and cancelled and that passed by the AO be restored, upholding the addition made by the AO. 11. On the other hand, ld. Counsel for the assessee has contended that during the course of assessment proceedings, the Assessing Officer issued show-cause notice dated 22.03.2021 incorporating draft order wherein, merely on comparison of the financial projections used for DCF valuation with the actual financial results for certain period, the Assessing Officer treated the valuation of shares as per DCF method as ....
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....thod ("NAV method") prescribed therein; or (b) as determined by a merchant banker or accountant as per DCF method contending that no money/consideration was actually received by the assessee on conversion of loans to shares, after a conversion of the partnership firm of the assessee company, and that thereby, the provisions of Section 56(2)(viib) of the Act are not applicable. The ld. Counsel for the assessee has submitted that Section 56(2)(viib) of the Act provides for taxation, if the company receives any consideration in excess of fair market value of shares. That the assessee has not received any money/ consideration on issuance of shares; the shares have been issued in lieu of already outstanding loan received from existing shareholders itself. It was reiterated that the assessee company came into existence on 23.03.2017 by conversion of the Firm. All the partners of the Firm became shareholders of the company. The Firm was also enjoying substantial amount of loan facility from its partners, namely, SBIPL and SBEPL granted from time to time vide loan agreement(s) dated 01.07.2010. It was upon conversion of the firm to Company that the existing loans were converted into equity....
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.... that "the intention was not to tax transactions carried out in the normal course of business or trade, the profit of which are taxable under the specific head of income". The said circular, it is respectfully submitted, further fortifies the contention of the assessee that the provision of section 56(2)(viib) of the Act arc not applicable on genuine business transaction without there being any evidence stating otherwise. 30. In view of the aforesaid, in absence of any money/ consideration flowing to the assessee company on issue of shares and keeping in mind the avowed objective behind introduction of section 56(2)(viib) of the Act, the said section has no application. In that view of the matter, addition made by the assessing officer under section 56(2)(viib) of the Act is liable to be deleted at the threshold, on the said ground itself. 31. It is further submitted that once the transaction is tested by the tax department and the assessing officer is satisfied that the transaction is a genuine business transaction, i.e., without any clement of tax avoidance, then, there is no requirement to further test FMV of issue of shares at premium, applying provisions of s....
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....) - affirmed by Gujarat High Court in [2014] 221 Taxman 158 6. CIT vs. Manjulabcn M. Unadkat: 229 Taxman 53 1 (Gujarat) 7. Shri Rajendra 11 Seth v. ACIT in ITA No. 1495/Ahd/2007 (Ahd. Trib.) Sosamma Paulosc vs. JOT: 79 TTJ 573 (Coch.) 8. Rameshwaram Strong Glass (P.) Ltd v. ITO: |2018| 172 ITD 571 (Jaipur) 14.1 So far as the action of the AO in substituting the method of valuation being allegedly beyond jurisdiction, the ld. Counsel for the assessee has contended that while section 56(2)(viib) of the Act intends to tax the consideration received for issue of share which is in excess of fair market value of such shares, Rule 11 UA(2)(a) & (b) of the Rules provide two methods of valuation for ascertaining FMV of unquoted equity shares (i) Discounted Cash Flow (DCF) and (ii) Net asset Value (NAV) method. The assessee, it is submitted, has option to choose any of the aforesaid two methods. It was further contended that the valuation of shares of the assessee company has been undertaken using the DCF method based on projected financial position for the next 12 years; that Discounted Cash Flow Method is the most accepted international methodology for valuing....
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.... (ii) 'Appropriate discount rate to be applied to cash flows; (iii) Sustainable growth rate and terminal value after explicit forecast period. The forecasted results usually change because of some events and circumstances that do not occur as expected or are not anticipated; market conditions are changing rapidly due to fast changing technology and also due to changing Government policies. Actual results will, therefore, always differ from the forecast and sometimes the difference may be material. To put it differently, considering that the DCE Method is essentially based on projections (estimations), the projections cannot be compared with the actuals so as to expect the same figures as were projected. Accordingly, the projections under DCF method have to be scrutinised with the facts and data available on the date of valuation and not by comparison with the actuals. In that view of the matter, variation between the projections and the actual results achieved cannot be the basis for disregarding/rejecting the valuation as per DCF method. 17. For the proposition that the FMV of a share determined as per the DCF method and duly supported by the Valuation Report o....
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....ss, contrafactual and not sustainable for the following reasons: 19. While no adverse inference has been drawn in respect of discounting factor and terminal value used by the valuer for valuation as per DCF method, the assessing officer has doubted the forecasted/ estimated profits used for valuation on the ground that the same are not corroborated by the actual financial results for few years, viz., FY 2017-18, 2018-19 and 2019-20. 20. In this regard, it is submitted that profit forecast necessarily depends upon subjective judgment. It is always assumed that the business continues normally without any disruption due to internal/ external occurrence. The forecast is based on present circumstance s, as to most likely set of conditions and the most likely course of action. It is usually the case that some events and circumstances do not occur as expected or arc not anticipated. For that reason, actual results achieved in future cannot be a basis to decide about reliability of the projections. 21. Projection of cash flow is based on projected fund flow and profit and loss account, in a new-industry, as in the present case of the assessee, the projection has to be made before ....
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....en taken on the basis of Power Purchase Agreement executed with Knowledge Infrastructure Private Limited. Other direct income : CER (Carbon credit) On the date of assumption, carbon credit was saleable and the Hydro Plants having capacity up to 50 MW were entitled. It was traded on the basis of quoted rates. Later the eligibility to avail CER was reduced from 50 MW to 25 MW. Thus, the assessee later became ineligible. O & M Expenses Operation and maintenance expenses were estimated to 1% of the cost of fixed assets with annual increase of 5.72% Depreciation It is worked out on the basis of rate of depreciation provided under Indian Companies Act. Finance Cost interest on working capital and term loan has been worked out considering rate of interest then charged by the banks, i.e., 10.35% for working capital and 12,65% for term loan. As regards unsecured loan, the lenders were the shareholders and were not charging any interest in the past; hence not considered. Current Tax Company was eligible for tax holiday u/s 80IA, however was liable for MAT which has been worked out on the basis of then prevailing rate. 23. Detailed working sheet of assumptions....
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....of the assessee; that the assessee company was selling electricity to Chhattisgarh State Power Distribution Company Limited (CSPDCL) during 8t h July 2017 to 31^st May 2018 at interim rates of Rs. 3.14 per unit as against projected rate of Rs. 4.25 per unit. Later, Chhattisgarh Slate Electricity Regulatory Commission (CSERC) has approved the final tariff at Rs 5.98 per unit resulting into likely gain of Rs 12.16 Crores for F.Y. 2017-18 and Rs 4.80 crores in F.Y. 2018-19. This has affected the actual PB f considered for F.Y. 2017-18 & 2018-19. Relevant extract of order of CSERC approving the tariff of Rs. 5.98 per unit is available at pages 92-112 of PB. 25. It was submitted that the assessee has borrowed more than Rs. 330 crores from banks, finance cost was assumed adopting interest rate of 12.65 % p.a whereas interest was paid @ 12.71 % pa. during F.Ys 2017-18, 2018-19 and @ 13.05 % in FY. 2019- 20. It has resulted in payment of excess interest than projected at Rs 3.77 crores. Rs. 4.01 crores and Rs. 4 crores for FY. 2017-18, 2018-19 and 2019-20 respectively. Further, the implied allegation that the valuation has been inflated through profit projections in DCF valuation is bas....
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....he valuer in the present case has analysed and reviewed the data and found it to be consistent and reasonable. The valuer has categorically stated that there is nothing to indicate that the information provided had material mis-statement (reference has been made to the Valuation Report placed at pages 57-69 of IMS). Further, it was submitted that for various reasons, the actuals are bound to differ with the projections and therefore, in such a situation to avoid any allegation of professional negligence, the valuer always adds a disclaimer/caveat qua the projections, which the valuer has no means to verify; that the same does not mean that the value assigned by the valuer is unreliable or unrealistic, especially when the valuation has been done with widely and internationally accepted methodology. It was submitted that there are valid reasons for variation between the projections and actual and if the above valid reasons are considered, the variation between the projected PBT and actual PBT stands duly explained and there will be no room to disbelieve the projections which were the basis for valuation under DCF method. It was submitted that the estimation which formed the basis of ....
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.... agreed to grant/novate loans in favour of the assessee company. Further, the covenant in the said Agreement provided for conversion of loan to shares of the assessee company, at the option of the lenders/shareholders. 27.1 The loans were originally given by the partners to the Firm pursuant to respective loan agreement(s) dated 01.07.2010 (reference pages 37-46 of PB). Post conversion of the Firm into the assessee company, fresh loan agreements dated 23.03.2017 (reference pages 47-56 of PB) were entered between the latter (assessee) and the lenders (partners/ shareholders), primarily for novation of loans from the Firm to the assessee company. Vide the said agreements, the shareholders agreed to grant/novate loan in favour of the assessee company; further, a covenant in the said agreement provided for conversion of loan to shares of the assessee company, at the option of the lenders/ shareholders. 27.2 In pursuance of the aforesaid loan agreement(s), the pre-incorporation loan given by the erstwhile partners (now shareholders) were converted into shares of the assessee company, by issue of fresh equity shares of Rs 10/- each at premium of Rs. 90/- per share (total Rs. 100 pe....
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....assessee. It was noted by the AO that valuation of DCF method cannot take a fictitious figures invented and coined only to arrive at a premeditated figure of share value. It was further observed by the AO that DCF method Valuation led to share value of Rs. 106 per share as compared to Rs. 8.54 per share by NAV method. As there was huge difference in value shown by two different methods prescribed under rule 11 UA of I.T. Rules, it was concluded by the AO that appellant could not justify the projection of financial statements which was far removed from the actual business and financial realities of the assessee company. (iii) The AO referred to the decision of Hon'ble Supreme Court in the case of McDowell & Co. Ltd. , 154 ITR 148, CIT vs. Durgaprasad More 82 ITR 540, CIT Vs. Sri Meenakshi Mills Ltd., 63 ITR 609 and concluded that the DCF valuation used by the assessee was bogus and sham and has no connection with the real figures. (iv) The AO noted that on conversion of the firm into company on 23.03.2017, all the partners became shareholders and unsecured loans given by the erstwhile partners were converted into equity shares at a premium Thus, there was inten....
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....t was also contended that once the transaction is tested by the tax department and found genuine without any element of tax avoidance, there cannot be any requirement to test FMV of issue of shares at premium applying the provision of Section 56(2)(viib) of the Act. The appellant has relied on the decision in Clearview Healthcare Pvt. Ltd. Vs. ITQ 181 ITD 141 (Delhi branch). Cinestaan Entertainment Pvt. Ltd., 170 ITD 809 (Delhi branch) and similar other decisions to support this contention. (iv) As regards the rejection of appellant's valuation of DCF method, it is contended that the choice of valuation method is available to the assessee (NAV or DCF) as per provision of Rule 11UA of IT. Rules and the AO substituting the method of valuation by NAV is completely beyond jurisdiction and invalid. The appellant relied on the decision of Bombay High Court in the case of Vodafone M-Pera Ltd. Vs. DCIT, 164 ITR 257, wherein the Hon'ble Court held that the AO cannot change the method adopted by the assessee for share valuation by DFC method which was violation of Rule 11UA. The appellant has referred to similar decision of Mumbai ITAT, Bangalore, ITAT Delhi ITAT to emphasiz....
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....tstanding as on 01.04.2017 were converted into share capital. The shares were issued at Rs. 10 per share face value and premium of Rs. 90 per share. After plain reading of S.56(2)(viib), there is no doubt that this provisions is applicable to the considerations received in the previous year under consideration for taxing the excess premium charged over and above fair market value of shares determined as per prescribed method under Rule 11UA. In the current facts of the case, the appellant did not receive any consideration in the current assessment year and the outstanding loans of existing partners of erstwhile firm was converted into the shares of the appellant company. Thus, prima facie, there is no justification for the AO to apply Section 56(2)(viib) of the Act in the appellant's case. The said consideration in the form of unsecured loans were received from the partner of the erstwhile firm in the year 2010 (as evidenced from loan agreement) and the AO could not bring out any material facts to show that such conversion of loans to equity shares was a ploy to defraud revenue of the tax on such transaction. In fact, the loans received in earlier years also got tested through ....
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....he DCF valuation by the appellant so as to re-adjust the same. Even otherwise, I am of the firm opinion that this S.56(2)(viib) of the Act is not applicable to the facts of the current case. iii) The AO's only reasons for rejection of DCF method of valuation is found to be variation in projected figures and actual figures. The Courts / Tribunals have held in the decisions referred by the appellant that there is bound to have difference in projected and actual figures and valuation method cannot be rejected on this ground. In view of the above facts and discussion, it is apparent that there is no case of application of Section 56(2)(viib) to the facts of appellant's case where pre-existing unsecured loans of partners/shareholders were converted into equity shares at premium and the facts of assessment order do not indicate any case of tax abuse involved in such share conversion. Even the AO's decision to substitute DCF method of share valuation by NAV method is not in accordance with the Rule 11UA of IT. Rules. Accordingly, addition of Rs 202,50,00,0007- u/s. 56(2)(viib) of the Act is hereby deleted. 30. It is, thus, seen that the ld. CIT(A) has obse....
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.... which got duly verified in the scrutiny of various assessment years after loans receipt. 30.1 As regards the valuation of shares, in the decision referred by the appellant, the Courts / Tribunals have invariably held that the AO is not authorized to pick and choose a particular method of valuation of share as the option is specifically given to the assessee as per Rule 11UA(2) of I T. Rules. The AO has power to verify the method of valuation adopted by the assessee but the same cannot be substituted by NAV method once the assessee has exercised option of DCF valuation method. In the case of Creditalpha Alternatives Investment Advisors Pvt. Ltd. (supra), the Hon'ble Mumbai Tribunal held that the AO can question the basic assumptions made by the valuer and if those are unreasonable, adjust the valuation so claimed at, but cannot substitute the method of valuation as discretion was given to the assessee. In the current case, I find that the AO has not found any specific error in the assumptions of projected figures neither adjusted the same with different valuation by the DCF method itself. Rather, the AO rejected DCF method and proceeded to value shares by NAV method merely o....
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....following the 'Book Value', or the Net Asset Value (NAV) Method for valuing shares as per the Balance Sheet of the immediately preceding year, whereas the valuer of the Assessee had followed the 'Discounted Free Cash Flow' or 'DCF' method for valuation of the shares; that this method is permitted by section 56(2)(viib) of the Act read with rule 11UA of the Rules; and that for this reason, the "Book Value' or the Net Asset Value (NAV) Method of valuation cannot be preferred over and above the 'DCF' Method. 34. The relevant provisions first. 35. Section 56(2) of the I.T. Act prescribes incomes which are not to be excluded from the total income under the Act and shall be chargeable to income tax under the head 'Income from Other Sources'. Clause (viib) of section 56(2) prescribes one such income, as follows; '56(2). In particular, and without prejudice to the generality of the provisions of sub-section (1), the following incomes shall be chargeable to income-tax under the head "Income from other Sources" namely:- (i) to (viia) (viib) where a company, not being a company in which the public are substantially intere....
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....on date which was been audited by the auditor of the company appointed under section 224 of the Companies Act, 1956 (1 of 1956) and where the balance sheet on the valuation date is not drawn up, the balance sheet (including the notes annexed thereto and forming part of the accounts) drawn up as on a date immediately preceding the valuation date which has been approved and adopted in the annual general meeting of the shareholder of the company (ii).... (c) to (i) (j) "valuation date" means the date on which the property or consideration, as the case may be is received by the assessee.' 40. The fair market value, for the purposes of section 56 of the I.T. Act, of property, other than immovable property, in the nature of unquoted equity shares, is to be determined in the manner provided in rule 11 UA(l)(c)(b), as follows: '11UA (1) For the purposes of section 56 of the Act, the fair market value of a property, other than immovable property, shall be determined in the following manner, namely - (a).... (b).... (c) valuation of shares and securities, - (a) ...... (b) the fair market value of unquoted equi....
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....the Rules, rule 11UA(2) provides for the fair market value of unquoted equity shares to be determined in the manner laid down in clause (a) or clause (b) of the rule, i.e., by following either the Book Value (NAV) Method, or the Discounted Free Cash Flow Method, at the option of the assessee. Rule 11UA(2) reads thus: (2) Notwithstanding anything contained in sub-clause (b) of clause (c) of sub-rule (I), the fair market value of unquoted equity shares for the purposes of sub-clause (i) of clause (a) of Explanation to clause (viib) of sub-section (2) of section 56 shall be the value, on the valuation date, of such unquoted equity shares as determined in the following manner under clause (a) or clause (b), at the option of the assessee, namely:- (a) the fair market value of unquoted equity shares = (A-L) / (PE) X (PV) where A = book value of the assets in the balance-sheet as reduced by any 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 and any amount shown in the balance-sheet as asset including the unamortised amount of deferred expenditure which d....
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....;s Balance Sheet as on 31.3.2016 (APB 11-18), from which, it is seen that as on 31.3.2015, the Assessee had share capital of Rs. 96,004,600/-and its total reserves and surpluses were at Rs. 3,35,605,909/-, giving a total amount of Rs. 431,610,509/-. There was 900046 fully paid shares. It was from this that the fair market value was arrived at by the Id. PCIT at Rs. 450/-. That this is as per the NAV Method, in accordance with rule HUA(2)(a), is clear, and not disputed. Thus, though it is not so stated, either in the Show Cause Notice dated 17.2.2021 (APB- 1-2), issued u/s 263 of the Act, or in the Order under appeal, it is evident and not disputed that the Id. PCIT employed the Book Value or NAV Method, as per rule 11UA(2)(a) of the Rules, for determining the fair market value of the unquoted equity shares issued by the Assessee, in violation of the option provided by rule 11UA (2), as noted hereinabove. 44. The assessee. on the other hand, exercised the option made available by rule 11UA(2), and arrived at the market value of its unquoted shares on the basis of the Discounted Free Cash Flow Method, or the DCF Method, as provided in rule 11UA(2(b). In the Reply dated 23.3.2021 (....
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....oner, the Assessee contended that this was contrary to rule 11UA of the I. T. Rules, as the rule provided an option to the Assessee to arrive at a fair market value of the shares, either as prescribed in rule 11 UA(2)(a) of the Rules, i.e., the NAV Method, or in terms of rule llUA(2)(b) of the Rules, i.e., the DCF Method. In exercise of this option, the Assessee had provided a valuation report based on adoption of the DCF Method. The AO, without any justification, as done by the Id. PCIT in the case at hand, gave a complete go-by to the DCF Method and adopted the NAV Method to determine the market value of the shares. The Hon'ble High Court observed that in the impugned order the Commissioner, however, did not deal with this primary grievance of the Assessee, even though he conceded that the method of valuation, namely, either the NAV method, or the DCF Method, to determine the fair market value of shares, has to be adopted at the Assessee's option; that nevertheless, the Commissioner had not dealt with the change in the method of valuation by the Assessing Officer, which change had resulted in the demand; that it was not open to the Assessing Officer to change the method o....
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.... of shares has to be in accordance with such method only. 47.3 The Tribunal further observed that the Assessee- company had exercised the option to value the shares by the DCF Method; that however, the AO had worked out the value based on the NAV method; that though in the body of the assessment order, he had referred to Rule 11UA(2)(b), in substance, he had valued the shares based on the book value figures only, by considering the value of the assets shown in the Balance Sheet. 47.4 The Tribunal further observed that though the Commissioner (Appeals) too had considered the case in the context of rule 11UA(2)(b), his action of asking for a valuation report only on actual figures was nothing other than asking for a valuation done on the basis of the Net Asset Value Method; that from the facts, it was clear that the taxing Authorities wanted to impose on the Assessee, the method of valuation of their own choice, completely disregarding the legislative intent which has given the Assessee an option to choose any one of the two methods of valuation; that when the law has specifically provided different methods of valuation and the Assessee exercised an option by choosing a particu....
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....ommercial rights of similar nature, whichever is higher; and that it is only the Explanation (a)(ii), which speaks of the satisfaction of the Assessing Officer, but there appears no such condition in the Explanation (a)(i) and, therefore, the Assessing Officer is not permitted to interfere in the valuation done in accordance with the method prescribed in rule 11UA(2). 47.8 The Tribunal concluded that thus, there was no justification behind rejecting the declared value of the shares and in the addition made by the Assessing Officer but partly sustained by the Commissioner (Appeals). The addition was deleted. 48. In 'Cinestaan Entertainment (P) Ltd. Vs. Income Tax Officer, Ward-6(2), New Delhi', [2019] 177 ITD 809 (Delhi), it was held that the Assessee has an option to do valuation of shares and determine fair market value either on the DCF Method, or the NAV Method; that the Assessing Officer cannot examine or substitute his own value in place of the value determined; that the Income Tax Department cannot sit in the armchair of the businessman to decide what is profitable and how business should be carried out; that commercial expediency has to be seen from the point o....
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....g Officer, nor the Assessee have been recognized as experts under the law. 48.1 In 'Principal Commissioner of Income Tax Vs. Cinestaan Entertainment Pvt. Ltd.', (2021) 433 ITR 82 (Del), it was contended on behalf of the Assessee-Respondent before the Hon'ble High Court, inter alia, that section 56(2)(viib) of the Act is not applicable to genuine business transactions; that the genuineness and creditworthiness of the strategic investors was not doubted by either the AO, or the CIT(A); that sub-clause (ii) of clause (a) of the Explanation to section 56(2)(viib) was not applicable to the case of the Respondent-Assessee and the Assessee was not required to satisfy the Assessing Officer about the valuation done; and that in accordance with sub-clause (i) of clause (a) of the Explanation to section 56(2)(viib). the Respondent-Assessee had an option to carry out a valuation and determine the fair market value of the shares only on the Discounted Cash Flow Method (the DCF Method), which was appropriately followed by the Respondent-Assessee. 48.2 Dismissing the appeal filed by the Department, the Hon'ble High Court observed, inter alia, that the shares were issued base....
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....provisions of the Act. 50. In 'Karmic Labs Pvt. Ltd. Vs. I TO order dated 28.7.2020, passed for assessment year 2014-15, in ITA No. 3955/Mum/2018, 'DOT Vs. M/s Ozoneland Agro Pvt. Ltd., (supra) and 'Vodafone M-Pesa Ltd. Vs. PCIT' (supra) were followed. 51. In 'Dada Ganpati Guar Products Pvt. Ltd. Vs. Principal Commissioner of Income Tax', (2021) 92 ITR (Trib) 408 (Chandigarh), the Chandigarh Tribunal has followed "Vodafone M-Pesa Ltd. Vs. Principal Commissioner of Income Tax'(supra), 'Principal Commissioner of Income Tax Vs. Cinestaan Entertainment Pvt. Ltd.' (supra), 'Rameshwaram Strong Glass (P.) Ltd. Vs. Income Tax Officer, Ward-2(1), Ajmer' (supra), and 'Cinestaan Entertainment (P.) Ltd Vs. Income Tax Officer, Ward- 6(2), New Delhi' (supra). 52. In 'Nirbhai Textiles Pvt. Ltd. Vs. The ACIT, Circle-2 Ludhiana', order dated 22.8.2022, for A.Y. 2014-15, in ITA No. 1401/Chd/2018. the Chandigarh Tribunal has followed "Principal Commissioner of Income Tax Vs. Cinestaan Entertainment Pvt. Ltd.'(supra), 'Vodafone M-Pesa Ltd. Vs. Principal Commissioner of Income Tax' (supra) and 'Dada Ganpati Guar Produc....