TaxTMI 
TaxTMI 
2023 (10) TMI 1596
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....ctive of the company is to carry on the business of rearing animals including cows, buffalos, goats, sheep, pigs, including male and female calves and bulls etc. for the purpose of producing milk and/or meat and the business of producers/ dealers in and purchase of dairy, poultry, fishing, floriculture, horticulture farm, garden and produce of all kinds and in particular milk cream, butter, ghee, cheese, poultry, eggs, fruits, vegetable oil, vegetable ghee, artificial ghee, porkpies, sausages, prawn, pelted meat, table delicacies, and to purchase, acquire, keep, maintain, sell, or otherwise dispose all kinds of cattle, cows, buffaloes, pigs, poultry, and live or dead stock of all description. 5. The assessee has submitted the proposed project to establish Hi-Tech Integrated Cow Farm with facilities of Milk Processing and Production of biogas and organic manure. 6. During the year under consideration, the assessee has raised share capital and share premium of Rs. 6,24,300/- and Rs. 12,42,35,700/- respectively. The shares were valued at Rs. 2,004/- per share, as per the Discounted Cash Flow Method. However, shares were allotted @ Rs. 2/- per share. 7. Inv....
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.... 4. The assessee co. has initially infused some funds for purchasing the land and advance for purchase of fodder. The MOA of the same were already filed with you vide letter dated 28.11.2017. 5. It is important to note that the company has managed to arrange 23.74 cr. through promoter's equity, by end of March-2017, out of the total requisite promoter's equity of Rs. 26.62 cr. 6. Due to shortage of fund the assessee could not infuse balance amount of its equity. 7. The company managed to get extension of loan till April, 2016 (extension letter is enclosed) but could not succeeded in arranging the funds. 8. The company is still in process of searching the option to put in the requisite promoter's equity for starting project and optimistic to start the business by March 2018. 9. Financials of the company for the year 2016-17 has already been submitted vide letter dated 28th November, 2017 from where the structural changes may be identified. (attached again for your reference) 9. Detailed submissions of the assessee were dismissed by the Assessing Officer who was of the opinion that the reasons cited by the assessee for not starting the project is....
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.... the valuation of shares which is based on zero activity of the assessee. 17. These observations of the Assessing Officer are not accepted on finding the fact that on the very basis of said valuation report, Canara Bank has vetted the report for sanctioning the loan. Certificate from the bank is exhibited at pages 23 of the Paper book and after vetting the report, the bank sanctioned the loan of Rs. 26.20 crores on a total project cost of Rs. 43.85 crores. 18. The sanction letter is at page 64 of the Paper Book with security details at page 66. This clearly shows that the loan was sanctioned by the bank on the basis of valuation report submitted by an expert valuer, which cannot be discarded as done by the Assessing Officer. 19. The Assessing Officer disregarded the valuation report mainly on the ground that the valuation of equity shares was based on the projections of the revenue which was not there. The assessee has applied DCF Method for the purpose of valuation of shares and has relied on the valuation report of an expert valuer. 20. There is a settled law on the issue that as per section 56(2)(viib) of the Act r.w.r 11UA of the ITAT Rules, that as per Se....
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....ay not be relevant after certain period of time. ... 33. In any case, if law provides the assessee to get the valuation done from a prescribed expert as per the prescribed method, then the same cannot be rejected because neither the Assessing Officer nor the assessee have been recognized as expert under the law." 5.1 Similarly, it has been held that where a valuation report is to be rejected, the authority should pinpoint any specific inaccuracies or short comings in the DCF valuation report. In the Rockland Diagnostics Services Pvt. Ltd. vs. ITO case of Intelligrape Software Pvt. Ltd., vs. ITO in ITA No. 3925-Del- 2018 (Delhi Trib.), it has been held as under: "23. The AO was not able to pinpoint any specific inaccuracies or short comings in the DCF valuation report of the Chartered Accountant/Valuer other than stating that year-wise results as projected are not matching with the actual results declared in the final accounts. Before the Id. CIT (A), reasons for variation between projected and actuals were duly explained. The Ld. CIT (A) has accepted such explanation but rejected the DCF valuation report as submitted by the assessee. Accordingly, in ....