“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

Intas Pharmaceuticals Ltd., Ahmedabad vs. The DCIT, Circle-2(1)(1), Ahmedabad

Accordingly, this ground raised by the Revenue is dismissed

ITA 222/AHD/2021[2015-16]Status: DisposedITAT Ahmedabad21 May 2025AY 2015-16

Bench: S/Shri T.R. Senthil Kumar & Makarand V.Mahadeokarasstt.Year : 2015-16 Acit, Cir.2(1)(1) M/S.Intas Pharmaceuticals Ltd Vejalpur Vs Corporate House Ahmedabad. S.G. Highway Nr.Sola Bridge, Thaltej Ahmedabad 380 054. Pan : Aaaci 5120 L Asstt.Year : 2015-16 M/S.Intas Pharmaceuticals Ltd Acit, Cir.2(1)(1) Corporate House Vs Vejalpur S.G. Highway Ahmedabad. Nr.Sola Bridge, Thaltej Ahmedabad 380 054. Pan : Aaaci 5120 L (Applicant) (Responent) : Assessee By Shri S.N. Soparkar, Sr.Advocae & Shri Parin Shah, Ar : Shri Ragnesh Das, Cit-Dr Revenue By सुनवाई क" तारीख/Date Of Hearing : 28/04/2025 घोषणा क" तारीख /Date Of Pronouncement: 21/05/2025 आदेश आदेश/O R D E R आदेश आदेश

Section 115JSection 142(1)Section 143(2)Section 143(3)Section 144CSection 14ASection 35Section 36(1)(iii)Section 37Section 92C

Whether the CIT(A) has erred in law and on facts in not appreciating that non examination of the valuation of shares of the amalgamated company by the assessing officer while issuing certificate of no objection at the time of amalgamation does not bar the assessing officer from ever examining

Olympus Global Stocks Private Ltd., Delhi vs. PCIT Delhi-7, Delhi

In the result, the appeal of the assessee is allowed

ITA 662/DEL/2022[2015-16]Status: DisposedITAT Delhi21 May 2025AY 2015-16

Bench: Shri Shamim Yahya & Shri Vimal Kumara.Yr. : 2015-16 Olympus Global Stocks Vs. Pcit-7, New Delhi Private Ltd., D-248, Office 103, First Floor, Abhishek Business, Central Gali No. 10, Laxmi Nagar, Delhi – 92 (Pan: Aabco0085F) (Appellant) (Respondent)

For Appellant: Shri Salil Kapoor, Adv., Shri AnilFor Respondent: Ms. Amisha S. Gupta, CIT(DR)

Section 143Section 143(3)Section 14ASection 263Section 3Section 56(2)(viia)

PCIT is of the opinion that in the Chartered Accountant certificate in this regard MAT entitlement has not been taken into account for valuation of shares. We find that this is debatable issue whether MAT credit should be taken into account for valuation of shares or not? In this regard

Nina Kshetry, Noida vs. ACIT, Circle Int.Tax. 2(1)(2), New Delhi

In the result, the appeal of the assesses in ITA 1876/Del/2023, ITA

ITA 1878/DEL/2023[2016-17]Status: DisposedITAT Delhi19 May 2025AY 2016-17

Bench: Sh. C.N. Prasad & Sh. Naveen Chandraassessment Year: 2016-17

Section 148

shareholders of M/s UEM India Pvt Ltd. The ld AR further argued that the Ld. AO has grossly erred in referring to the valuation of shares at Rs. 234.91/- provided in the Valuation Report submitted by the assessee since the report was solely intended for internally evaluating the Page ... approach is riddled with inconsistencies in as much as on one hand, the Ld. AO erroneously ignores that the valuation of shares at the time of disposal was arrived at pursuant to a predetermined formula contained within the SHA and places reliance on a valuation report which had nothing

Hersh Vardhan Kshetry, Noida vs. ACIT, Circle Int. Tax. 2(1)(2), New Delhi

In the result, the appeal of the assesses in ITA 1876/Del/2023, ITA

ITA 1877/DEL/2023[2016-17]Status: DisposedITAT Delhi19 May 2025AY 2016-17

Bench: Sh. C.N. Prasad & Sh. Naveen Chandraassessment Year: 2016-17

Section 148

Sangita Kshetry, Noida vs. ACIT, Circle Int.Tax. 2(1)(2), New Delhi

In the result, the appeal of the assesses in ITA 1876/Del/2023, ITA

ITA 1876/DEL/2023[2016-17]Status: DisposedITAT Delhi19 May 2025AY 2016-17

Bench: Sh. C.N. Prasad & Sh. Naveen Chandraassessment Year: 2016-17

Section 148

Meditation Properties Pvt Ltd, New Delhi vs. ITO Ward-16(3), New Delhi

In the result, impugned order is set aside and appeal of the assessee is allowed

ITA 9394/DEL/2019[2015-16]Status: DisposedITAT Delhi19 May 2025AY 2015-16

Bench: Shri Vikas Awasthyआअसं.9394/िद"ी/2019(िन.व. 2015-16) Meditation Properties P. Ltd., Flat No. 10, C-1/2, Model Town, New Delhi 110009 ...... अपीलाथ"/Appellant Pan: Aaacm-1194-N बनाम Vs. Assistant Commissioner Of Income Tax, Appeal-6, Laxmi Nagar, District Centre, ..... "ितवादी/Respondent New Delhi 110092 अपीलाथ" "ारा/ Appellant By : Shri Parveen Kumar, Executive Employee "ितवादी"ारा/Respondent By : Shri Manoj Kumar, Sr. Dr सुनवाई क" ितिथ/ Date Of Hearing : 19/05/2025 घोषणा क" ितिथ/ Date Of Pronouncement : : 19/05/2025 आदेश/Order Per Vikas Awasthy, Jm: This Appeal By The Assessee Is Directed Against The Order Of Commissioner Of Income Tax (Appeals)-6, Delhi (Hereinafter Referred To As 'The Cit(A)') Dated 27.09.2019, For Assessment Year 2015-16. 2. Shri Parveen Kumar, Appearing On Behalf Of The Assessee Submits That The Short Issue In Appeal Is That The Case Of Assessee Was Selected For Limited Scrutiny For The Following Reasons: “(I) There Is A Large Difference In The Opening Stock Of The Current Year & The Closing Stock Of Previous Year In P&L Account As Per Return Of Income; &

For Appellant: Shri Parveen Kumar, Executive EmployeeFor Respondent: Shri Manoj Kumar, Sr. DR

Section 143(2)

which were approved for limited scrutiny. The AO expanded the scope and made inquiries with regard to assessee’s investment in shares and valuation of shares. The AO made enquiries beyond the mandate of limited scrutiny and finally 3 rejected assessee’s books and made GP addition

DCIT, Central Circle-28, New Delhi vs. Manish Uppal, Delhi

In the result, assessee’s appeal in ITA No

ITA 3061/DEL/2022[2013-14]Status: DisposedITAT Delhi16 May 2025AY 2013-14

Bench: Ms. Madhumita Roy & Shri Naveen Chandraassessment Year: 2013-14

Section 132(1)Section 143(1)Section 147Section 148Section 153ASection 68

Truthful DevconPvt. Ltd. or the transfer of management of company to Mr. Ashish Begwani and Mr. Sukanta Roy or the valuation of shares of M/s Saransh Developer Deptt. w.r.t. claim of the appellant that he had paid tax @20% on the long term capital gain arisen

Juniper Networks India Private Limited, Mumbai vs. Principle Commissioner of Income Tax, Central Circle-1, Mumbai

In the result, appeal of the assessee is allowed

ITA 2042/MUM/2024[2017-18]Status: DisposedITAT Mumbai09 May 2025AY 2017-18

Bench: Sandeep Singh Karhail & Shri Girish Agrawalassessment Year: 2017-18

For Appellant: Shri Vijay Mehta, Ms. Forum GudhkaFor Respondent: Ms. Neena Jeph, CIT DR

Section 142(1)Section 143(3)Section 263Section 37(1)Section 92C

without examining the details in this respect by the ld. Assessing Officer. According to him, ld. Assessing Officer did not examine the valuation of shares of JNI since it is not a listed public company, correctness of the claim for the discounted premium based on vesting period of entitlement

Madhurima International Private Limited, Mumbai vs. Deputy Commissioner of Income Tax Circle 3(2)(1), Mumbai

ITA 4430/MUM/2024[2013-14]Status: DisposedITAT Mumbai06 May 2025AY 2013-14

Bench: SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER SMT. RENU JAUHRI (Accountant Member)

For Appellant: Shri Madhur AgrawalFor Respondent: Shri R. R. Makwana

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

realize a better realization on divestments 10 Assessment Year: 2013-2014 We are also enclosing working of projected cash flow used in valuation of shares alongwith copy, of financials of MHML for the year ended 31 March 2014 and fair value working in Indian Rupees.” (Emphasis Supplied) 16. To support

Wns Global Services Private Limited, Mumbai vs. Asessment Unit, National Faceless Assessment Centre, New Delhi

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

ITA 4432/MUM/2024[AY 2020-2021]Status: DisposedITAT Mumbai05 May 2025

Bench: Shri Anikesh Banerjee & Shri Prabhash Shankarwns Global Services Private Vs Assessment Unit, National Faceless Limited, Mumbai Assessment Centre, New Delhi Pl-10/11, Gate No.4, Godrej- Boyce Complex, Pirojshanagar, L.B.S.Marg, Vikhroli (West), Mumbai-400 079 Pan: Aaacw2598L Appellant Respondent

For Appellant: ShriPorus Kaka A/w Manish KanthFor Respondent: Shri Pankaj Kumar (CIT DR)

Section 143(3)Section 144BSection 144CSection 144C(13)Section 144C(5)Section 253

A.Ys 2016-17 and 2017-18. During the hearing before the Ld.DRP, the Ld.AR submitted that the adjustment made on account of valuation of shares and treatment as excess as deemed loan and charging of interest thereto was duly deleted in assessment years ... disposed off accordingly." 9.3.2. Further during the course of hearing, the applicant submitted that the adjustments made on account of valuation of shares and treatment of the excess as deemed loan and charging of interest thereof has been deleted for both the years

ACIT, Central Circle-1, Thane vs. Nakul Markhedkar, Thane

ITA 786/MUM/2025[2015-16]Status: DisposedITAT Mumbai30 Apr 2025AY 2015-16

Bench: Shri Saktijit Dey, Vp & Ms Padmavathy S, Am

For Respondent: Shri Rakesh Ranjan - Sr. DR

Section 132Section 153ASection 56(2)(vii)

fair market value of a property, other than immovable property, shall be determined in the following manner, namely,— (a) & (b) ****** (c) valuation of shares and securities,— (a) ***** [(b) the fair market value of unquoted equity shares shall be the value, on the valuation date, of such unquoted equity shares ... fair market value of a property, other than immovable property, shall be determined in the following manner, namely,- (a) & (b) ** ** (c) valuation of shares and securities,- (a) ** ** [(b) the fair market value of unquoted equity shares shall be the value, on the valuation date, of such unquoted equity shares

ACIT, Central Circle-1, Thane vs. Nakul Markhedkar, Thane

ITA 785/MUM/2025[2016-17]Status: DisposedITAT Mumbai30 Apr 2025AY 2016-17

Bench: Shri Saktijit Dey, Vp & Ms Padmavathy S, Am

For Respondent: Shri Rakesh Ranjan - Sr. DR

Section 132Section 153ASection 56(2)(vii)

Anatole Solutions Private Limited, Jaipur vs. ACIT Circle 2, Jaipur

In the result, the appeal of the assessee is allowed

ITA 1082/JPR/2024[2017-18]Status: DisposedITAT Jaipur28 Apr 2025AY 2017-18

For Appellant: Shri Ashok Kumar Gupta, AdvocateFor Respondent: Shri Manoj Kumar, JCIT-DR

Section 115BSection 234ASection 56(2)(viib)

premium of Rs.2,179.49 per share, resulting in fresh share capital of Rs.9,50,000/- and share premium of Rs.59,41,180/-. The valuation of shares was based on the Discounted Cash Flow (DCF) method. No business activities were carried out by the company until 31.03.2015. The issuance of shares

M/S Accord Mediplus Pvt Ltd, Pune vs. Income Tax Officer, Ward-1(1), Pune

ITA 17/PUN/2024[2018-19]Status: DisposedITAT Pune07 Apr 2025AY 2018-19

Bench: Dr.Manish Borad & Shri Vinay Bhamore

For Appellant: Shri Kishor B. Phadke and Shri Piyush BafnaFor Respondent: Shri Chandra Vijay

Section 1Section 147Section 56(2)

circumstances of the case, Ld. CIT- Appeal has erred in law and on facts, in not referring the matter of valuation of shares of the Appellant Company through the office of Departmental Valuation Officer u/s 55A of ITA, 1961 and has further erred in assigning cryptic and incorrect reasoning while ... circumstances of the case, Ld. CIT-Appeal has erred in law and on facts, in not referring the matter of valuation of shares on the basis of tangible / intangible assets of the Appellant Company through the office of Departmental Valuation Officer u/s 55A of ITA, 1961 and has further erred

M/S Accord Mediplus Pvt Ltd, Pune vs. Income Tax Officer, Ward-1(1), Pune

ITA 16/PUN/2024[2017-18]Status: DisposedITAT Pune07 Apr 2025AY 2017-18

Bench: Dr.Manish Borad & Shri Vinay Bhamoreआयकर अपील सं. / Ita Nos.13 To 17/Pun/2024

Section 1Section 147Section 56(2)

M/S Accord Mediplus Pvt Ltd, Pune vs. Income Tax Officer, Ward-1(1), Pune

ITA 15/PUN/2024[2016-17]Status: DisposedITAT Pune07 Apr 2025AY 2016-17

Bench: Dr.Manish Borad & Shri Vinay Bhamore

For Appellant: Shri Kishor B. Phadke and Shri Piyush BafnaFor Respondent: Shri Chandra Vijay

Section 1Section 147Section 56(2)

M/S Accord Mediplus Pvt Ltd, Pune vs. Income Tax Officer, Ward-1(1), Pune

ITA 14/PUN/2024[2015-16]Status: DisposedITAT Pune07 Apr 2025AY 2015-16

Bench: Dr.Manish Borad & Shri Vinay Bhamore

For Appellant: Shri Kishor B. Phadke and Shri Piyush BafnaFor Respondent: Shri Chandra Vijay

Section 1Section 147Section 56(2)

M/S Accord Mediplus Pvt Ltd, Pune vs. Income Tax Officer, Ward-1(1), Pune

ITA 13/PUN/2024[2014-15]Status: DisposedITAT Pune07 Apr 2025AY 2014-15

Bench: Dr.Manish Borad & Shri Vinay Bhamore

For Appellant: Shri Kishor B. Phadke and Shri Piyush BafnaFor Respondent: Shri Chandra Vijay

Section 1Section 147Section 56(2)

Navratan Management Private Limited, Mumbai vs. Dy.Comm Central Circle 8(4) Mumbai, Mumbai

ITA 3586/MUM/2024[2017-18]Status: DisposedITAT Mumbai04 Apr 2025AY 2017-18

Bench: Shri Narender Kumar Choudhry

Section 132Section 143(1)Section 153ASection 2(14)Section 250Section 56(2)(via)Section 56(2)(vii)Section 56(2)(viia)

appears to be more than the face value, on which the shares were purchased and therefore he asked the Assessee to furnish the valuation of shares of such company. The Assessee furnished valuation report, on perusing the same the AO observed that fair market value per share of M/s. Utility ... share is more than the face value for which the shares were purchased. Therefore, the A.O asked the assessee to furnish the valuation of share of M/s Utility Supply Pvt. Ltd. The assessee furnished the valuation report of share of M/s Utility Supply Pvt. Ltd. The A.O observed that

Utility Supply Private Limited, Mumbai vs. DCIT Central Circle 8(4) Mumbai, Mumbai

ITA 3585/MUM/2024[2017-18]Status: DisposedITAT Mumbai03 Apr 2025AY 2017-18

Bench: Shri Narender Kumar Choudhry & Ms. Padmavathy S

For Appellant: Shri Dhaval Shah, Ld. A.RFor Respondent: Ms. Smiti Samant, Ld. D.R

Section 132Section 143(1)Section 153ASection 250Section 56(2)(via)Section 56(2)(viia)

submitted by the appellant, however I defer with the decision of my predecessor Ld. CIT(A). The appellant has not contested the valuation of shares (FMV). Accordingly, the addition made by the A. of Rs.14,70,85,848/- is confirmed. The appeal on this ground no 1 an additional ground