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“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
82
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
69
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
56
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
51
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
49
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
37
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
35
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

Nkc Projects Private Limited, Jaipur vs. PCIT Delhi-4, Delhi

In the result, the appeal of the assessee is allowed

ITA 2804/DEL/2025[2020-21]Status: DisposedITAT Delhi24 Oct 2025AY 2020-21
Section 142(1)Section 143(3)Section 263

thereof whereby assessee had a vested interest in Sanwariya Gas Ltd., as per scope and ambit of limited scrutiny, therefore the issue of valuation of shares with applicability of provisions of section 56(2)(viib) as raised in SCN u/s 263 being beyond the scope of “limited scrutiny” is also

A B Propmart Pvt Ltd, New Delhi vs. ITO Ward 1(1), Delhi

In the result, appeal of the assessee is allowed

ITA 108/DEL/2025[2014-15]Status: DisposedITAT Delhi15 Oct 2025AY 2014-15

Bench: Shri Yogesh Kumar U.S & Shri Manish Agarwal[Assessment Year : 2014-15] A B Propmart Pvt.Ltd., Vs Ito, Punjabi Bhawan, 10 Ward-1(1), Rouse Avenue, Delhi-110002. Delhi Pan-Aagca7340G Appellant Respondent Assessee By Shri Chandan Agarwal, Ca & Shri Ajay Marwah, Ca Revenue By Shri Ajay Kumar Arora, Sr. Dr Date Of Hearing 17.07.2025 Date Of Pronouncement 15.10.2025 Order

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

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

Deputy Commissioner of Income Tax, Central Circle-20, Delhi vs. Hindustan Clean Energy Ltd., Delhi

In the result, the appeal of the Department is hereby dismissed

ITA 3876/DEL/2023[2021-22]Status: DisposedITAT Delhi15 Oct 2025AY 2021-22

Bench: Shri S. Rifaur Rahman & Shri Vimal Kumardcit, Central Circle 20, Vs. Hindustan Clean Energy Ltd., Delhi. 239, Phase – Iii, Okhla, Delhi – 110 020. (Pan : Aafcm8367C) (Appellant) (Respondent)

For Appellant: Shri V.K. Aggarwal, ARFor Respondent: Shri Kailash Dan Ratnoo, CIT DR

Government of Himachal Pradesh and its subsequent after effects have not been denied by the AO. In fact, AO has not disputed the valuation of shares which indicated the valuation at Rs.(-)1.49/- per share. Therefore, once the purchase price has been accepted in the year of acquisition and valuation

Kataria Snack Pellets Private Limited, Rajkot vs. Assistant Commissioner of Income Tax, Circle-1(1), Rajkot

In the result, appeal of the assessee is dismissed

ITA 468/RJT/2024[2015-16]Status: DisposedITAT Rajkot07 Oct 2025AY 2015-16

Bench: Dr. Arjun Lal Saini & Shri Dinesh Mohan Sinhaआयकर अपील सं /.Ita No.468/Rjt/2024 "नधा"रणवष"/ Assessment Year: 2015-16 Kataria Snack Pellets Pvt. Ltd. The Acit, Circle-1(1) बनाम 510, Gidc, Metoda Kalawad Road Rajkot Rajkot-360021, Gujarat Vs. Pan : Aafck2028L (अपीलाथ"/Appellant) (""यथ"/Respondent) :

For Appellant: Shri Nishit B. Jesur, ld.ARFor Respondent: Shri Sanjay Punglia, CIT-DR
Section 143(2)Section 143(3)Section 147Section 148Section 250Section 56(2)(vii)

Rs.80,000/-, as value of share and share premium of Rs. 3,99,20,000/-. Therefore, assessee was required to justify the valuation of share, as per provisions of Income Tax Act, 1961. Therefore, the assessing officer issued a show cause notice to the assessee, to explain the valuation ... entire amount of share capital and share premium of Rs. 4,00,00,000/-, was received during the relevant previous year. As regards valuation of shares, it was submitted that assessee-company had valued shares following DCF Kataria Snack Pellets Pvt. Ltd. ITA No.468 /RJT/2024 (AY : 2015-16) 4 (Discounted

Uniproducts (India) Ltd., New Delhi vs. ACIT, Circle- 27(1), New Delhi

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

ITA 6596/DEL/2018[2014-15]Status: DisposedITAT Delhi30 Sept 2025AY 2014-15

Bench: Shri Mahavir Singh & Shri Brajesh Kumar Singhuniproducts (India) Ltd., Vs. Acit, Circle 27(1), Khasra No. 360-361, Room No. 193, C.R. Bldg, Village Jonapur, New Delhi – 110 002 Mehraulli Delhi – 110 047 (Pan:Aaacu0224D) (Appellant) (Respondent) Appellant By : Sh. Sanjiv Rai Mehra, Ca Respondent By : Ms. Harpreet Kaur Hansra, Sr. Dr Date Of Hearing 25.09.2025 Date Of Pronouncement 30 .09.2025

For Appellant: Sh. Sanjiv Rai Mehra, CAFor Respondent: Ms. Harpreet Kaur Hansra, Sr. DR
Section 143(3)Section 56(2)(viib)Section 56(2)(vvib)

issue of 4140218 no. of shares @ Rs. 40 each. The assessee was asked by the AO to produce the valuation of shares as per Rule 11UA of the I.T. Rules as the assessee had issued the share more than the face value of share. The assessee replied vide letter dated ... produced the valuation of share adopting the Discounted Cash Flow Method as per Rule 11UA of the I.T. Rules. The assessee was show caused vide note sheet entry dated 23.11.2016 as to why the disallowance be not made for the share premium u/s. 56(2)(viib). The assessee again submitted

Venkataramesh Babu Kaza, Hyderabad vs. DCIT., Circle-12(1), Hyderabad

In the result, both the appeals of assessee are allowed

ITA 1250/HYD/2025[2018-19]Status: DisposedITAT Hyderabad26 Sept 2025AY 2018-19

Bench: Shri Vijay Pal Rao & Shri Manjunatha G

For Appellant: Shri K. Abhiroop Bhargav, C.AFor Respondent: Shri TV Vamshidhar, DR
Section 143(3)Section 270A

Court. 6. On the merits of addition, we find that the Assessing Officer has made addition only on the basis of difference of valuation of shares held by the assessee and reported in the ROI for the year under consideration as well as in the ROI for the Asst. Year ... shares or allotment of shares to the assessee during the year under consideration and therefore even if there is a change in the valuation of shares in the year under consideration without any investment or acquisition due to the market price of the shares, the same cannot be a reason

Ideaforge Technology Ltd, Mahape vs. ACIT, Circle 15(2)(1), Mumbai

The appeal of the assessee is allowed

ITA 867/MUM/2025[2017-18]Status: DisposedITAT Mumbai26 Sept 2025AY 2017-18

Bench: Shri Narender Kumar Choudhry & Smt. Renu Jauhriआयकर अपील सं./Ita No. 867/Mum/2025 (निर्धारण वर्ा / Assessment Year: 2017-18) Ideaforge Technology V/S. Assistant Commissioner Ltd. बिधम Of Income Tax, Circle El-146, Ttc Industrial 15(2)(1), Mumbai Area, Electronic Zone, Room No. 357, 3Rd Floor, Midc, Mahape, Navi Aayakar Bhavan, Maharshi Mumbai Karve Road, Mumbai 400020 स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No: Aabci6495B Appellant/अपीलधथी .. Respondent/प्रनिवधदी निर्धाररिी की ओर से /Assessee By: Shri Subodh Ratnaparkhi Shri. Leyaqat Ali Aafaqui (Sr Dr) रधजस्व की ओर से /Revenue By: सुिवधई की िधरीख / Date Of Hearing 22.08.2025 घोर्णध की िधरीख/Date Of Pronouncement 26.09.2025 आदेश / O R D E R Per Renu Jauhri [A.M.] :- This Appeal Is Filed By The Assessee Against The Order Of The National Faceless Appeal Centre (Nfac), Delhi [Cit(A)] Dated 11.12.2024, Passed U/S. 250 Of The Income-Tax Act, 1961 [Hereinafter Referred To As “Act”] For Assessment Year [A.Y.] 2017-18. 2. The Assessee Has Raised The Following Grounds Of Appeal: “On The Facts & In Law, 1. The Hon. Cit(A) Erred In Upholding The Action Of The Id Ao In Making Addition Of Rs. 6,60,02,100/- By Relying Upon The Provisions Of Section 56(2)(Viib) Of The It Act, 1961 On The Ground That The Consideration Received By The Appellant For Issue Of P A G E | 2

For Appellant: Shri Subodh Ratnaparkhi
Section 143(3)Section 250Section 56(2)(viIb)Section 56(2)(viib)

issue equity shares under private placement. With this in mind, the appellant company appointed M/s GHG & Co. Chartered Accountants for determining the valuation of shares. The appellant company based on the valuation provided by the cited Chartered Accountant firm issued equity shares at premium to resident Indian entities as given ... Banker M/s. Corporate Capital Ventures vide report dated 05.09.2019 determined FMV of equity share as on 30.06.2019 at Rs. 18,484/-. Thus, the valuation of shares is done as per DCF method in a fair and transparent manner by authority specified under Rule 11UA. 7.Unfortunately, the Id.AO did not accept

DCIT Circle-13(2), New Delhi vs. Jus Scriptum Magnus Pvt Ltd, New Delhi

In the result, we dismiss the appeal filed by the Revenue

ITA 8259/DEL/2019[2016-17]Status: DisposedITAT Delhi26 Sept 2025AY 2016-17
For Appellant: Shri Pramod Jain, CAFor Respondent: Shri Harpreet Kaur Hansra, Sr. DR
Section 133(6)Section 143(2)Section 56(2)(viib)

valuation of assets from the substantive provision of Sec 56(2)(vllb) of the Act. Rule 11UA provides the DFCF method for valuation of shares. However, In case the machinery provision falls to provide the correct fair market value of shares Issued by the company, for calculation of premium received ... book value method and other is DFCF method. 18. According to the Rule, once the assessee had exercise the option for valuation of shares as per Rule 11UA(2), The 15 assessing officer had no power to change the option of the assessee for valuation of shares

Pranoo Financial Services Private Limited, Mumbai vs. DCIT, Circle 13(1)(2), Mumbai

ITA 4580/MUM/2025[2017-18]Status: DisposedITAT Mumbai24 Sept 2025AY 2017-18

Bench: SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY (Judicial Member)

For Appellant: Shri Vipul Joshi & Ms. Sruti KalyanikarFor Respondent: Shri Virabhadra S. Mahajan
Section 143(3)Section 250Section 56(2)(viib)

factum of issuance of shares at a premium of INR.80 per share. The issue before the Tribunal pertains to the valuation of shares for the purpose of Section 56(2)(viib) of the Act. The contention of the Assessee is that the Assessee had issued shares at a premium ... 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 Assessing Officer has simply rejected

Income Tax Officer, New Delhi vs. Nine Plus Inftrastructure Private Limited, Gurgaon

In the result, the appeal of the assessee is allowed for statistical purposes

ITA 4887/DEL/2024[2015-16]Status: DisposedITAT Delhi19 Sept 2025AY 2015-16

Bench: Shri Madhumita Roy & Shri Amitabh Shukla

For Appellant: Shri S.N.Devatia, AdvFor Respondent: Shri Manoj Tiwari, Sr.DR
Section 143(3)Section 56Section 56(2)(viib)

appellant assessee had adopted the DCF method prescribed in Rule 11UA, whereas the Ld.AO proceeded to make the valuation by substituting the valuation of shares by adopting fair market value(FMV). The question that thus arises is whether the Ld.AO is entitled to do the same or not. The Ld.CIT ... appropriately left to the consideration and wisdom ofexperts in the field of accountancy, having regard to the imponderables which enter theprocess of valuation of shares. The Appellant-Revenue is unable to demonstrate that themethodology adopted by the Respondent-Assessee is not correct. The AO has simplyrejected the valuation

Income Tax Officer 11(2)(1), Mumbai vs. Shrem Alloys Private Limited, Mumbai

In the result, all the appeals filed by the Revenue stand dismissed

ITA 2192/MUM/2025[2014-15]Status: DisposedITAT Mumbai10 Sept 2025AY 2014-15

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI ARUN KHODPIA (Accountant Member)

Section 143(3)Section 147Section 148Section 153ASection 68

IN THE INCOME TAX APPELLATE TRIBUNAL, ‘E’ BENCH MUMBAI BEFORE: SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI ARUN KHODPIA , ACCOUNTANT MEMBER

Income Tax Officer 11 (2) (1), Mumbai vs. Everfine Alloys Private Limited, Mumbai

In the result, all the appeals filed by the Revenue

ITA 2186/MUM/2025[2015-16]Status: DisposedITAT Mumbai10 Sept 2025AY 2015-16
Section 143(3)Section 147Section 148Section 153ASection 68

IN THE INCOME TAX APPELLATE TRIBUNAL, ‘E’ BENCH MUMBAI BEFORE: SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI ARUN KHODPIA, ACCOUNTANT MEMBER

Income Tax Officer, Mumbai vs. Everfine Alloys Private Limited, Mumbai

In the result, all the appeals filed by the Revenue stand dismissed

ITA 2185/MUM/2025[2013-14]Status: DisposedITAT Mumbai10 Sept 2025AY 2013-14

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI ARUN KHODPIA (Accountant Member)

Section 143(3)Section 147Section 148Section 153ASection 68

IN THE INCOME TAX APPELLATE TRIBUNAL, ‘E’ BENCH MUMBAI BEFORE: SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI ARUN KHODPIA , ACCOUNTANT MEMBER

DCIT, Circle 4(2), New Delhi vs. Cerise Internet Technologies Pvt Ltd, New Delhi

ITA 3248/DEL/2024[2017-18]Status: DisposedITAT Delhi09 Sept 2025AY 2017-18

Bench: Ms. Madhumita Roy & Shri Naveen Chandradcit, Circle 4(2) Vs. Cerise Internet Room No.384, C.R. Technologies Pvt. Ltd. Building, Ip Estate, H 9/12, F/G Malviya Delhi – 110002 Nagar, Delhi - 110017 "थायीलेखासं./जीआइआरसं./Pan/Gir No: Aagcc1830M Appellant .. Respondent

For Appellant: NoneFor Respondent: Sh. Rajesh Kumar Dhanesta
Section 144

details of documents in the nature of resolution passed by the assessee to allot shares to Angel Investor, M/s Time Internet Ltd., the valuation of shares made by the Chartered Accountant dated 16.08.2016, the agreement of the investment drawn up between the assessee and M/s Time Internet Ltd. dated

Assistant Commissioner of Income Tax, Circle-2, Kota vs. Chambal Fertilizers and Chemicals Ltd., Kota

56. As a result, as regards the issue of allowance/disallowance of

ITA 1099/JPR/2024[2016-17]Status: DisposedITAT Jaipur27 Aug 2025AY 2016-17
For Appellant: Shri P.J. Pardiwala, AdvFor Respondent: Shri Rajesh Ojha, CIT &
Section 14ASection 36(1)Section 36(1)(iii)

which has been reported in form number AOC-1 at page number 208 of the annual report. The valuation of shares of Assessee Company in CFCL Ventures Limited, Cayman Islands is worked out only to Rs.151.38 Lakh which appears to be incorrect because all the assets of the amalgamated Company ... course of arguments, our attention has been drawn to the observations made by the Assessing Officer at page 75 and 76 that the valuation of shares of the assessee company in CFCL ventures Limited, Cayman Islands was found to have been worked only to Rs.151.38 lakh, which appeared

Assistant Commissioner of Income Tax, Circle-2, Kota vs. Chambal Fertilizers and Chemicals Ltd, Kota

56. As a result, as regards the issue of allowance/disallowance of

ITA 1098/JPR/2024[2015-16]Status: DisposedITAT Jaipur27 Aug 2025AY 2015-16
Section 14ASection 36(1)Section 36(1)(iii)

which has been reported in form number AOC-1 at page number 208 of the annual report. The valuation of shares of Assessee Company in CFCL Ventures Limited, Cayman Islands is worked out only to Rs.151.38 Lakh which appears to be incorrect because all the assets of the amalgamated Company ... course of arguments, our attention has been drawn to the observations made by the Assessing Officer at page 75 and 76 that the valuation of shares of the assessee company in CFCL ventures Limited, Cayman Islands was found to have been worked only to Rs.151.38 lakh, which appeared

Assistant Commissioner of Income Tax, Circle-2, Kota vs. Chambal Fertilizers and Chemicals Ltd., Kota

ITA 1097/JPR/2024[2011-12]Status: DisposedITAT Jaipur27 Aug 2025AY 2011-12

Bench: SHRI GAGAN GOYAL (Accountant Member), SHRI NARINDER KUMAR (Judicial Member)

For Appellant: Shri P.J. Pardiwala, AdvFor Respondent: Shri Rajesh Ojha, CIT &
Section 14ASection 36(1)Section 36(1)(iii)

which has been reported in form number AOC-1 at page number 208 of the annual report. The valuation of shares of Assessee Company in CFCL Ventures Limited, Cayman Islands is worked out only to Rs. 151.38 Lakh which appears to be incorrect because all the assets of the amalgamated ... course of arguments, our attention has been drawn to the observations made by the Assessing Officer at page 75 and 76 that the valuation of shares of the assessee company in CFCL ventures Limited, Cayman Islands was found to have been worked only to Rs. 151.38 lakh, which appeared

Assistant Commissioner of Income Tax, Circle-2, Kota vs. Chambal Fertilizers and Chemicals Ltd, Kota

ITA 1091/JPR/2024[2017-18]Status: DisposedITAT Jaipur27 Aug 2025AY 2017-18

Bench: SHRI GAGAN GOYAL (Accountant Member), SHRI NARINDER KUMAR (Judicial Member)

For Appellant: Shri P.J. Pardiwala, AdvFor Respondent: Shri Rajesh Ojha, CIT &
Section 14ASection 36(1)Section 36(1)(iii)

which has been reported in form number AOC-1 at page number 208 of the annual report. The valuation of shares of Assessee Company in CFCL Ventures Limited, Cayman Islands is worked out only to Rs. 151.38 Lakh which appears to be incorrect because all the assets of the amalgamated ... course of arguments, our attention has been drawn to the observations made by the Assessing Officer at page 75 and 76 that the valuation of shares of the assessee company in CFCL ventures Limited, Cayman Islands was found to have been worked only to Rs. 151.38 lakh, which appeared

Assistant Commissioner of Income Tax, Circle-2, Kota vs. Chambal Fertilizers and Chemicals Ltd, Kota

ITA 1090/JPR/2024[2010-11]Status: DisposedITAT Jaipur27 Aug 2025AY 2010-11

Bench: SHRI GAGAN GOYAL (Accountant Member), SHRI NARINDER KUMAR (Judicial Member)

For Appellant: Shri P.J. Pardiwala, AdvFor Respondent: Shri Rajesh Ojha, CIT &
Section 14ASection 36(1)Section 36(1)(iii)

which has been reported in form number AOC-1 at page number 208 of the annual report. The valuation of shares of Assessee Company in CFCL Ventures Limited, Cayman Islands is worked out only to Rs. 151.38 Lakh which appears to be incorrect because all the assets of the amalgamated ... course of arguments, our attention has been drawn to the observations made by the Assessing Officer at page 75 and 76 that the valuation of shares of the assessee company in CFCL ventures Limited, Cayman Islands was found to have been worked only to Rs. 151.38 lakh, which appeared

DCIT(CC)-8(3), Mumbai vs. Nakchhatra Vimleshkumar Mehta, Mumbai

In the result, the appeal filed by the Revenue in ITA No

ITA 3777/MUM/2025[2012-13]Status: DisposedITAT Mumbai25 Aug 2025AY 2012-13

Bench: Shri Amit Shukla & Shri Girish Agrawal

For Appellant: Shri Devendra JainFor Respondent: Shri Leyaqat Ali Aafaqui
Section 10(38)Section 143(1)Section 143(3)Section 147Section 148

share to as many as 49 investors at a premium of Rs. 10/- per share. The Ld. AO has doubted the valuation of shares on the premise that the market value was much lower than the issue price LAW & HUSTI the financials of the company did not justify issue