MEDWELL VENTURES PRIVATE LIMITED,DELHI vs. THE DY. CIT, CIRCLE-2(1)(1), AHMEDABAD

ITA 1775/AHD/2025Status: DisposedITAT Ahmedabad18 September 2026AY 2018-1926 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the AO erred in rejecting the DCF method for share valuation and that the addition under Section 56(2)(viib) was unsustainable. It also held that the addition under Section 69C was incorrect as the expenditure was accounted for and paid through banking channels.

What were the facts?

The assessee company issued shares at a premium, and the Assessing Officer (AO) made an addition under Section 56(2)(viib) by rejecting the Discounted Cash Flow (DCF) method and using the Net Asset Value (NAV) method for valuation. The AO also made an addition under Section 69C for alleged unexplained expenditure due to discrepancies in vendor confirmations.

What were the issues?

Whether the AO was justified in rejecting the DCF method for share valuation and making additions under Section 56(2)(viib)? Whether the addition under Section 69C for unexplained expenditure was valid when the expenditure was accounted for and paid through banking channels?

Which sections of the Income-tax Act were involved?

Section 56(2)(viib),Section 69C,Section 270A,Section 271AAC

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, D” BENCH, AHMEDABAD

Per Rahul Chaudhary, Judicial Member:

1.

The present appeal has been preferred by the Assessee against the Order, dated 31/07/2025, passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the ‘CIT(A)’] whereby the Learned CIT(A) had dismissedthe appeal against the Assessment Order, dated 12/03/2021, passed under Section 143(3) of the Income Act, 1961 [hereinafter referred to as ‘the Act’] for the Assessment Year 2018-2019. 2. The Assessee has raised the following grounds of appeal:

“1. Ground No. 1 - Addition made under section 56(2)(viib) of th

The order continues below.

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