“valuation of shares”

Special Rate ProvisionsRule 11UARule 11UA508 judgments

The decision most relied on for valuation of shares is PCIT v. Chain House International (P) Ltd. (98 Taxmann.com 47), cited in 104 judgments on BharatTax.

Leading authorities on valuation of shares

PCIT v. Chain House International (P) Ltd.

98 Taxmann.com 47 · 2018 · High Court

104

citing judgments

The Assessing Officer cannot arbitrarily reject a share valuation report prepared by an expert using recognized methods like NAV or DCF for the purpose of Section 56(2)(viib) without providing valid reasons to demonstrate its perversity or unreasonableness.

CIT v. George Henderson & Co. Ltd.

66 ITR 622 · 1967 · Supreme Court

citing judgments

The 'full value of consideration' for computing capital gains under Section 48 of the Income Tax Act, 1961 (or its predecessor, Section 12B of the 1922 Act), means the actual price bargained for and received or accrued by the parties. It does not refer to the market value or any notional value of the asset transferred.

Vodafone M-Pesa Ltd. v. PCIT

164 DTR 257 · 2018 · High Court

citing judgments

An assessee has the option to choose either the Discounted Cash Flow (DCF) method or the Net Asset Value (NAV) method for share valuation under Section 56(2)(viib) read with Rule 11UA. The Assessing Officer cannot substitute the chosen method or value without identifying a specific error in the assessee's valuation.

CIT v. Green Infra Ltd.

78 Taxmann.com 340 · 2017 · High Court

citing judgments

The valuation of shares is not relevant for determining the genuineness of a transaction under Section 68 of the Income Tax Act. Interest income earned on the deposit of surplus funds is taxable as business income.

CIT v. Bank of Baroda

262 ITR 334 · 2003 · High Court

citing judgments

An assessee is entitled to claim a deduction for the depreciation in the value of investments, such as shares and securities, if these investments are valued at cost or market value, whichever is lower, consistent with the real income principle.

PCIT v. Cinestaan Entertainment Pvt Ltd.

433 ITR 82 · 2021 · High Court

citing judgments

The Assessing Officer cannot reject the share valuation method adopted by an assessee under Section 56(2)(viib) if it adheres to prescribed methodologies and commercial prudence. The valuation cannot be challenged based on future performance or by substituting another method.

Jeevan Investment & Finance (P.) Ltd. v. CIT

88 Taxmann.com 552 · 2017 · High Court

citing judgments

An Assessing Officer's failure to conduct necessary inquiries renders the assessment order erroneous and prejudicial to the revenue, justifying revision under Section 263.

Innoviti Payment Solutions Pvt. Ltd. v. ITO

102 Taxmann.com 59 · 2019 · ITAT

citing judgments

The Assessing Officer (AO) cannot discard the Discounted Cash Flow (DCF) method for share valuation if the assessee opts for it as per Rule 11UA(2). The AO must record reasons for not accepting the assessee's valuation report and obtain a fresh report before proceeding with their own valuation, but cannot change the method chosen by the assessee.

Judgments citing valuation of shares

Asirvad Micro Finance Limited, Anna Salai vs. Assistant Commissioner of Income Tax, Corporate Circle -1(1), Chennai

In the result, the appeal of the assessee is allowed

ITA 1140/CHNY/2025[2016-17]Status: DisposedITAT Chennai05 Dec 2025AY 2016-17

Bench: Shri Aby T Varkey & Shri Amitabh Shuklaआयकर अपील सं./Ita No.1140/Chny/2025 Assessment Years: 2016-17 Asirvad Micro Finance Limited, Assistant Commissioner Of No.9, 9Th Floor, Club House Road, Income Tax, Annasalai, Corporate Circle-1(1), Chennai-600 002 Chennai. [Pan: Aagca5275J] (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Assessee By : Mr.P.R.Prasanna Varma, Fca & Mr.Arjun Rajagopalan, C.A. प्रत्यर्थी की ओर से /Revenue By : Mr.Bipin C.N, Cit सुनवाई की तारीख/Date Of Hearing : 25.09.2025 घोषणा की तारीख /Date Of Pronouncement : 05.12.2025 आदेश / O R D E R Per Amitabh Shukla, A.M :

For Appellant: Mr.P.R.Prasanna Varma, FCA &For Respondent: Mr.Bipin C.N, CIT

Section 2(18)Section 2(71)Section 56(2)Section 56(2)(viib)Section 8

contra, the Ld.DR relied upon the order of the lower authorities stating that the disturbances made to the assessee’s valuation of shares and the consequent addition u/s section 56(2)(viib) r.w. Rule Page - 6 - of 16 11UA is based upon correct understanding and interpretation of the facts

ACIT, New Delhi vs. M/S. Kct Papers Ltd., New Delhi

In the result, grounds raised by the revenue are dismissed

ITA 3380/DEL/2014[2008-09]Status: DisposedITAT Delhi05 Dec 2025AY 2008-09

Bench: Shri S.Rifaur Rahman & Shri Anubhav Sharmaacit, Circle 5 (1) Vs. M/S. Kct Papers Limited, New Delhi. Thapar House, 124, Janpath, New Delhi – 110 001. (Pan : Aacck4937D) (Appellant) (Respondent) Assessee By : Shri Rohit Jain, Advocate Shri Deepesh Jain, Advocate Shri Tavish Verma, Advocate Revenue By : Shri Kailash Dan Ratnoo, Cit Dr Date Of Hearing : 10.09.2025 Date Of Order : 05.12.2025 O R D E R Per S.Rifaur Rahman: 1. This Appeal Is Filed By The Assessee Against The Order Of Ld. Commissioner Of Income-Tax (Appeals)-Viii, New Delhi [Hereinafter Referred To As ‘Ld. Cit (A)] Dated 21.03.2014For Assessment Year 2008-09. 2. Brief Facts Of The Case Are, The Assessee Company Belongs To The Thapar Group Established By Late Lala Karam Chand Thapar. There Was A Family Settlement Between The Various Constituents Of The Karam Chand Thapar Family As A Result Of Which Revenue-Organization/Restructuring Of The Group Dated 27Th April, 2001. The Re April, 2001. The Re-Organization Of The Group Companies & Trusts Organization Of The Group Companies & Trusts Was Made Into Four Groups, As Under, Each Headed By The Sons Of Late Lala Was Made Into Four Groups, As Under, Each Headed By The Sons Of Late Lala Was Made Into Four Groups, As Under, Each Headed By The Sons Of Late Lala K.C. Thapar. The Family Tree Of Karam Chand T K.C. Thapar. The Family Tree Of Karam Chand Thapar Family Is Explained As Hapar Family Is Explained As Under In The Form Of A Diagrammatic Chart: Under In The Form Of A Diagrammatic Chart:

For Appellant: Shri Rohit Jain, AdvocateFor Respondent: Shri Kailash Dan Ratnoo, CIT DR

Section 391

Arrangement and Reconstruction contained on page no.32 of the said compiler. It has been observed that there has been no change in the valuation of shares since initial purchase by previous owner till the date of their acquisition by appellant company. These shares have been valued at historical cost only

Deputy Commissioner of Income Tax, Bengaluru vs. Flipkart India Pvt Ltd, Bengaluru

In the result, both the appeals filed by the Revenue are dismissed

ITA 1395/BANG/2025[2021-22]Status: DisposedITAT Bangalore04 Dec 2025AY 2021-22

Bench: Shri Prashant Maharishi & Shri Keshav Dubey

For Appellant: Shri Shivanand Kalakeri, CIT(DR)(ITAT), BengaluruFor Respondent: Shri Ajay Vohra, Sr. Advocate

Section 143(3)Section 37

Assessee in the form of brand value. This again is an argument without bringing on record any material to substantial that valuation of shares were done only because of value being ascribed to brand or goodwill or any intangibles. The valuation of shares

Deputy Commissioner of Income Tax, Central Circle-1(4), Bengaluru vs. Flipkart India Pvt Ltd, Bengaluru

In the result, both the appeals filed by the Revenue are dismissed

ITA 1394/BANG/2025[2020-21]Status: DisposedITAT Bangalore04 Dec 2025AY 2020-21

Bench: Shri Prashant Maharishi & Shri Keshav Dubey

For Appellant: Shri Shivanand Kalakeri, CIT(DR)(ITAT), BengaluruFor Respondent: Shri Ajay Vohra, Sr. Advocate

Section 143(3)Section 37

Intermesh Shopping Network Private Limited, Mumbai vs. ITO, Ward 12(3), Delhi

In the result, the appeal of the assessee is allowed

ITA 1579/MUM/2024[2016-17]Status: DisposedITAT Mumbai01 Dec 2025AY 2016-17

Bench: Shri M. Balaganesh & Shri Sudhir Kumarintermesh Shopping Network Pvt. Ltd, Vs. Ito, Lower Ground Unit No. 1-06, Ward-12(3), Boomerang, Chandivali Farmroad, Delhi Chandivali, Mumbai-400072 (Appellant) (Respondent) Pan: Aaaci7990L

For Appellant: Ms. Simran Dhawan, Adv (VC)For Respondent: Shri Om Prakash, Sr. DR

Section 131Section 142(1)Section 143(3)Section 56(2)(viib)

assessee was show-caused as to why the valuation report prepared by the Intermesh Shopping Network Pvt. Ltd valuer be rejected and the valuation of shares may be calculated as per Rule 11UA of the Income Tax Rules and difference of valuation of shares may be added under Section

Kishori Pankaj Agarwal, Vadodara, Gujarat vs. Income Tax Officer, Vadodara, Gujarat

ITA 623/AHD/2023[2015-16]Status: DisposedITAT Ahmedabad27 Nov 2025AY 2015-16

Bench: SHRI SANJAY GARG (Judicial Member), SHRI NARENDRA PRASAD SINHA (Accountant Member)

For Appellant: Shri P. M. Jagatsheth, A.RFor Respondent: Shri Rignesh Das, CIT. DR

Section 10(38)Section 250Section 68

incurred a business loss of Rs. 53,02,455/- though the shares are not sold. The difference is only because the valuation of shares which is as per the Accounting standard and the share of Kappac Pharma are still forming part of closing stock of the assessee company

Kayum Razak Dhanani, Bangalore vs. Deputy Commissioner of Income Tax, Central Circle-2(2), Bengaluru

Appeal of the assessee is allowed

ITA 634/BANG/2024[2015-16]Status: DisposedITAT Bangalore24 Nov 2025AY 2015-16

Bench: Shri Prashant Maharishi & Shri Soundararajan K.Assessment Year: 2015-16

For Appellant: Shri V. Chandrashekar, AdvocateFor Respondent: Shri Shivanand Kalakeri, CIT(DR)(ITAT), Bengaluru

Section 127Section 132Section 139Section 143Section 143(3)Section 153ASection 56(2)(vii)

agreed to pay tax on this. 10. Accordingly the learned assessing officer noted that there is an under valuation of shares to the extent of ₹ 180,169,920/– on account of under valuation of shares of barbecue nations private limited in the hands of the assessee, and show cause notice

DCIT, Circle 3(1)(1), Bengaluru, Bmtc Building, Koramangala vs. Gtr Aluminium Private Limited, Bengaluru

In the result the appeal filed by the revenue is dismissed

ITA 165/BANG/2024[2015-16]Status: DisposedITAT Bangalore21 Nov 2025AY 2015-16

Bench: Shri Waseem Ahmed & Shri Keshav Dubeyassessment Year : 2015-16

For Appellant: Sri Monish Sowkhar, A.RFor Respondent: Sri Balusamy N., D.R

Section 143(3)Section 250Section 253Section 263Section 56(2)(viib)

Income-tax Officer, Ward - 7(1)(2), Bengaluru [2021] 131 taxmann.com 121 (Bangalore - Trib.) held “Adoption of DCF method for valuation of shares is recognized under section 56(2)(viib) which was introduced by Finance Act, 2012 and, hence, applicable in assessment year 2013-14.” In the present case ... report on DCF Method produced during assessment M/s. GTR Aluminium Pvt. Ltd., Bangalore Page 15 of 16 proceedings was a valid report justifying valuation of shares without appreciating that there was no basis for projections made under DCF method and also ignoring the reasons assigned by assessing authority

Capricon Realty Private Limited, Mumbai vs. Income Tax Officer, Central Circle Mumbai

In the result, the appeal of the assessee is allowed

ITA 5696/MUM/2025[2018-19]Status: DisposedITAT Mumbai18 Nov 2025AY 2018-19

Bench: Shri Vikram Singh Yadav & Shri Anikesh Banerjeeassessment Year : 2018-19

For Appellant: Ms. Neha ParanjpeFor Respondent: Shri Virabhadra Mahajan, Sr.DR

Section 143(3)Section 14A

expertise or market research or any other analysis is required before making investment in these shares. The only cost incurred in respect of valuation of Shares of Sister concern of Rs. 2,14,442/- was disallowed by the appellants themselves while computing the Total Income (Refer Computation of Total Income

JCIT(OSD), New Delhi vs. Manish Vij, Delhi

In the result, the appeal of the revenue is dismissed

ITA 1746/DEL/2025[2022]Status: DisposedITAT Delhi14 Nov 2025

Bench: Shri C. N. Prasad & Shri M. Balaganeshjcit, Vs. Manish Vij, A-1,/ 134, 1St Floor, Sk (Osd), Delhi Enclave, South West Delhi (Appellant) (Respondent) Pan: Aagpv7555H

For Appellant: Shri Salil Aggarwal, AdvFor Respondent: Shri Mahesh Kumar, CIT (DR)

Section 143(3)Section 144BSection 48Section 50C

prescribed methods under Rule 11UA of the Income Tax Rules. It was also submitted that choice of usage of method of valuation of shares i.e. NAV or DCF Manish Vij always vested with the assessee, which cannot be tinkered by the ld AO without pointing out any defect ... valued shares on 22.04.2021 and 14.02.2022 had appeared before the ld AO during e-hearing and explained in detail the reasons for valuation of shares as per NAV and DCF method on two different dates. Both valuers duly justified the valuation of shares using NAV and DCF method

Coffeeday Trading Limited, Bangalore vs. DCIT, Circle-2(2)(1), Bangalore

In the result, the Assessee’s appeal is allowed for statistical purposes in the aforesaid terms

ITA 1172/BANG/2025[2020-21]Status: DisposedITAT Bangalore12 Nov 2025AY 2020-21

Bench: Shri Narender Kumar Choudhry & Shri Waseem Ahmedassessment Year: 2020-21

For Appellant: Ms. Mega , Ld. CA/ARFor Respondent: Shri Balusamy N, Ld. JCIT D.R

Section 143(2)Section 250

also considered the claim of the Assessee that M/s KMCCL was engaged to ensure a fair price, identify a single buyer, safeguard the valuation of share and facilitate the transfer of controlling share to the buyer, however, these services are not entirely and exclusively in connection with transfer of share ... Axis capital) 6.2.7 The appellant asserted that the bank was engaged to ensure a fair price, identify a single buyer, safeguard the valuation of shares, and facilitate the transfer of controlling shares to the buyer These services, however, are not entirely or exclusively in connection with transfer of shares

Anjani Agarwal, Kolkata vs. PCIT (Central) Kolkata - 2, Kolkata

In the result, the appeal of the assessee is allowed

ITA 403/KOL/2025[2021-22]Status: DisposedITAT Kolkata11 Nov 2025AY 2021-22

Bench: Shri Duvvuru Rl Reddy, Vp & Shri Rajesh Kumar, Am Pcit (Central) Kolkata-2, Anjani Agarwal Dcit, Central Circle-4(3), 1D, Ashoka, 14, Ashoka Road, Aayakar Bhawan Poorva, Alipore H.O. Vs. 110, Shantipally, Kolkata- Kolkata-700027, West Bengal 700107, West Bengal (Appellant) (Respondent) Pan No. Aehpa0038H Assessee By : Shri S.K. Tulsiyan, Ar Revenue By : Shri Raja Sengupta, Dr Date Of Hearing: 21.08.2025 Date Of Pronouncement: 11.11.2025

For Appellant: Shri S.K. Tulsiyan, ARFor Respondent: Shri Raja Sengupta, DR

Section 142(1)Section 143(3)Section 263Section 56(2)(x)

PCIT has invalidly invoked jurisdiction u/s 263 of the Act to revise the assessment by mis-construing the facts qua the valuation of shares. The ld. AR submitted that during the year the assessee acquired the share of M/s Ankit Polyfabs Pvt. Ltd. to the tune

M/S. Ambattur Developers Pvt. Ltd., Chennai vs. ITO, Corporate Ward-1(1), Chennai

ITA 2601/CHNY/2024[2015-16]Status: DisposedITAT Chennai11 Nov 2025AY 2015-16

Bench: Shri Manu Kumar Giri & Shri S.R. Raghunathaआयकर अपील सं./Ita No.: 2601/Chny/2024 निर्धारण वर्ष / Assessment Year: 2015-16 M/S. Ambattur Developers Private Limited, (Amalgamated With Ambattur Hotels Private Limited) No. 86/E2, Industrial Estate, Ambattur, Chennai - 600 058. Tamil Nadu. [Pan: Aaeca-7490-D] (अपीलार्थी/Appellant) Income Tax Officer, Vs. Corporate Ward- 1(1), Chennai. (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/Appellant By प्रत्यर्थी की ओर से/Respondent By : Shri. R. Vijayaraghavan, Advocate : Shri. Bipin, C.N., Cit सुनवाई की तारीख /Date Of Hearing घोषणा की तारीख/Date Of Pronouncement : 09.09.2025 : 11.11.2025 आदेश /Order Per S.R.Raghunatha, Am : This Appeal By The Assessee Is Filed Against The Order Of The Learned Commissioner Of Income Tax (Appeal), Nfac, Delhi, (In Short Ld.Cit(A)) For The Assessment Year 2015-16, Vide Order Dated 12.08.2024. 2. The Grounds Raised By The Assessee Are As Follows: :-2-:

For Respondent: Shri. R. Vijayaraghavan, Advocate

Section 50CSection 56(2)(vii)

आयकर अपीलीय अधिकरण, 'सी' न्यायपीठ, चेन्नई IN THE INCOME TAX APPELLATE TRIBUNAL 'C' BENCH, CHENNAI श्री मनु कुमार गिरि, न्यायिक

Ravi Shroff, Mumbai vs. Assistant Commissioner of Income Tax - 25(3), Mumbai, Bandra (East)

In the result, all remaining ground are allowed with the aforesaid directions

ITA 4186/MUM/2023[2015-16]Status: DisposedITAT Mumbai07 Nov 2025AY 2015-16

Bench: SHRI PAWAN SINGH (Judicial Member), SHRI PRABHASH SHANKAR (Accountant Member)

Section 143(3)Section 234BSection 234CSection 250Section 254(1)Section 28Section 28(1)

dealing with the Ground Nos. 1.3 (in respect of applicability of section 28(1), 1.4 (in respect of applying Rule 11UA for valuation of shares), 1.5. (v) (in respect of arriving at a separate value for non-compete fees), 1.6, 1.7, 1.8 and 19 of the appeal filed before

Assistant Commissioner of Income Tax, Central Circle-2(4), Pune vs. Sanghvi Beauty and Technologies Private Limited, Pune

In the result, both the appeal filed by the Revenue as well

ITA 2120/PUN/2024[2021-22]Status: DisposedITAT Pune04 Nov 2025AY 2021-22

Bench: Dr. Manish Borad & Shri Vinay Bhamore

For Respondent: "1) On the facts and in the circumstances of the case and in law

Section 143(3)Section 56(2)(viib)Section 56(2)(x)

Second Valuation Certificate the Fair Market Value per share is Rs.1,61,077/-. Justification filed by the assessee for the increase in the valuation of shares within period of 8 months mainly on account of covid-19 and fast growth was not found satisfactory by the AO and he made

M/S. Thiruvalluvar Textiles Pvt. Ltd., Rasipuram vs. ACIT, Central Circle-1(1), Chennai

In the result, the appeal of the assessee is allowed for A

ITA 1737/CHNY/2025[2017-18]Status: DisposedITAT Chennai04 Nov 2025AY 2017-18

Bench: Shri George George K & Shri S.R.Raghunatha

For Appellant: Shri. Y.Sridhar, FCAFor Respondent: Shri. Shiva Srinivas, CIT

Section 11

submitted that the difference in the projections and the actual financials submitted was only due to following one of the methods for valuation of shares prescribed under the Act as per Rule 11UA and the assumptions made for the purpose of projections and valuation thereof cannot be rejected. In support ... made by the Assessing Officer stating that the assessee had not furnished the valuation report certified by the independent CA and also the valuation of shares based on NAV method by considering the market value of land and held as under: “13.2 I have carefully examined the assessment order

M/S. Thiruvalluvar Textiles Pvt. Ltd., Rasipuram vs. ACIT, Central Circle-1(1), Chennai

In the result, the appeal of the assessee is allowed for A

ITA 1736/CHNY/2025[2016-17]Status: DisposedITAT Chennai04 Nov 2025AY 2016-17

Bench: Shri George George K & Shri S.R.Raghunatha

For Appellant: Shri. Y.Sridhar, FCAFor Respondent: Shri. Shiva Srinivas, CIT

Section 11

M/S.Thiruvalluvar Textiles Pvt. Ltd., Rasipuram vs. ACIT, Central Circle-1(1), Chennai

In the result, the appeal of the assessee is allowed for A

ITA 1735/CHNY/2025[2014-15]Status: DisposedITAT Chennai04 Nov 2025AY 2014-15

Bench: Shri George George K & Shri S.R.Raghunatha

For Appellant: Shri. Y.Sridhar, FCAFor Respondent: Shri. Shiva Srinivas, CIT

Section 11

M/S. Thiruvalluvar Textiles Pvt. Ltd., Rasipuram vs. ACIT, Central Circle-1(1), Chennai

In the result, the appeal of the assessee is allowed for A

ITA 1734/CHNY/2025[2013-14]Status: DisposedITAT Chennai04 Nov 2025AY 2013-14

Bench: Shri George George K & Shri S.R.Raghunatha

For Appellant: Shri. Y.Sridhar, FCAFor Respondent: Shri. Shiva Srinivas, CIT

Section 11

Savegenie E-Marketing Private Limited, Gurgaon vs. ITO, Ward-4(1), Gurgoan

In the result, the appeal of the assessee in ITA No

ITA 3847/DEL/2024[2015-16]Status: DisposedITAT Delhi27 Oct 2025AY 2015-16

Bench: Ms. Madhumita Roy & Shri Naveen Chandra

For Appellant: Shri Mukesh Mittal, CAFor Respondent: Shri Manish Gupta, Sr. DR

Section 139(1)Section 143(3)Section 147Section 148Section 56(2)(vii)Section 68

viib) of the Act read with Rule-11 UA of the Income tax Rules, 1962, every assessee has an option to conduct valuation of shares and determine its Fair Market Value either by DCF method or NAV method, and that the Assessing Officer cannot substitute his own value in place ... left to the consideration and wisdom of experts in the field of accountancy, having regard to the imponderables which enter the process of valuation of shares. The Appellant-Revenue is unable to demonstrate that the methodology adopted by the Respondent-Assessee is not correct. The AO has simply rejected