INTERMESH SHOPPING NETWORK PRIVATE LIMITED,MUMBAI vs. ITO, WARD 12(3), DELHI

ITA 1579/MUM/2024Status: DisposedITAT Mumbai01 December 2025AY 2016-17Bench: SHRI M. BALAGANESH (Accountant Member), SHRI SUDHIR KUMAR (Judicial Member)7 pages
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What did the Tribunal hold?

The Tribunal held that the AO was not justified in rejecting the DCF method solely because projected turnover was not achieved. It was also noted that the valuer confirmed the report under oath and that the disclaimer in the report was standard. The Tribunal relied on judicial precedents, including a High Court decision that overturned a contrary Tribunal ruling.

What were the facts?

The assessee company issued equity shares at a premium. The Assessing Officer (AO) rejected the valuation report obtained by the assessee, which used the Discounted Cash Flow (DCF) method, and instead used the Net Asset Value (NAV) method, leading to an addition under Section 56(2)(viib) of the Income Tax Act. The Commissioner of Income Tax (Appeals) upheld the AO's order.

What were the issues?

Whether the rejection of the DCF valuation report by the AO and the subsequent addition under Section 56(2)(viib) was justified. Whether a standard disclaimer in a valuation report renders it invalid.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 56(2)(viib),Section 142(1),Section 131,Section 11UA

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Cases cited in this judgment(2)Show list

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Income Tax Appellate Tribunal, DELHI BENCH “C”: NEW DELHI

Before: SHRI M. BALAGANESH & SHRI SUDHIR KUMAR

For Appellant: Ms. Simran Dhawan, Adv (VC)
For Respondent: Shri Om Prakash, Sr. DR
Hearing: 02/09/2025Pronounced: 01/12/2025

PER M. BALAGANESH, A. M.:

1.

The appeal in ITA No. 1587/Mum/2024 for AY 2016-17, arises out of the order of the ld. Commissioner of Income Tax (Appeals), Delhi [hereinafter referred to as „ld. NFAC‟, in short] in Appeal No. ITBA/NFAC/S/250/2023-24/1060575010(1) dated 06.02.2024 against the order of assessment passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as „the Act‟) dated 24.12.2018 by the Assessing Officer, ITO, Ward-12(3), Delhi (hereinafter referred to as „ld. AO‟).

2.

Though the assessee had raised several grounds of appeal before us, the effective issue to be decided in this appeal is a s to whether the Learned CITA was justified in upholding the addition u/s 56(2)(viib) of

The order continues below.

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