Taxpayers Can Choose Valuation Method for Fair Market Value; Assessing Officers Cannot Challenge Chosen Method in Assessments.

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....The High Court held that u/r 11UA(2) of the Income Tax Rules, 1962, the assessee has the option to choose between the Net Asset Value method or the Discounted Cash Flow (DCF) method for computing the fair market value for the applicability of Section 56(2)(viib) of the Income Tax Act. Once the assessee exercises this option, the Assessing Officer cannot question the applicability or computation of the fair market value using the chosen method, even during regular assessment proceedings. The Assessing Officer cannot reopen the assessment merely because the valuation under one method is lower than the other method chosen by the assessee, as this does not constitute an escapement of income. The court opined that the Assessing Officer cannot as.........