“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

Acron Hospitaliy Private Limited, Mumbai vs. Principle Commissioner of Income Tax -6, Mumbai

In the result, the appeal filed by the assessee is allowed

ITA 1277/MUM/2024[2015-16]Status: DisposedITAT Mumbai03 Apr 2025AY 2015-16

Bench: Ms. Kavitha Rajagopal, Jm & Shri. Omkareshwar Chidara, Am

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

situated at Goa after considering the extra FAR/FSI available to the said properties. The assessee further contended before the ld. PCIT that the valuation of shares cannot be as per the book value and further contended that the ld. PCIT ought to have given an alternate fair value of shares ... prepared the valuation report based on audited balance sheet as on 31.03.2014 will be valid and to be considered as the basis for valuation of shares. The assessee also contended before the ld. PCIT that subsequent to 31.03.2014, the assessee company has neither acquired nor disposed off any significant value

Manjulaben Jayantibhai Patel, Khambhat vs. The Addlcit, National Faceless Assessment Centre, Delhi Juridictional AO : the ITO, Ward- 1(3)(1), Petlad

In the result, the appeal of the assessee stands allowed

ITA 1559/AHD/2024[2016-17]Status: DisposedITAT Ahmedabad24 Mar 2025AY 2016-17

Bench: Shri Sanjay Gargassessment Year 2016-17

For Appellant: Ms. Arti N. Shah, A.RFor Respondent: Shri Ashok Kumar Suthar, Sr. D.R

Section 147Section 147rSection 56(2)(vii)

I.T.A No. 1559/Ahd/2024 Manjulaben Jayantibhai Patel, A.Y. 2016-17 2. The sole issue involved in this appeal is relating to the valuation of shares allotted to the assessee by the company namely Baroque Pharmaceutical Ltd. while converting the unsecured loans given to the said company ... Income Tax Act read with rule 11(UA) of the Income Tax Rules on account of difference in the valuation of shares calculated as per rule 11(UA) as compared to the valuation given in the valuation report obtained from independent valuer. 3. The Assessing Officer has passed the order

Tutor Investment and Finance Pvt Ltd, Mumbai vs. DCIT, Central Circle 6(4), Mumbai

In the result, the orders of the ld

ITA 289/MUM/2025[2015-16]Status: DisposedITAT Mumbai24 Mar 2025AY 2015-16

Bench: Shri Narender Kumar Choudhry & Shri Prabhash Shankar

For Appellant: Shri Snehal Shah, CAFor Respondent: Shri Hemanshu Joshi, (Sr. DR)

Section 143(3)Section 147Section 148Section 56(2)(viib)Section 68

right perspective. 4.The Learned CIT (A) 54, Mumbai Erred in confirming the addition Rs. 1,46,58,000/- on account of difference in valuation of shares u/s. 56(2)(viib) of the Act, 1961 without appreciating the facts of the case in the right perspective

Tutor Investment and Finance Pvt Ltd, Mumbai vs. DCIT Central Circle 6(4), Mumbai

In the result, the orders of the ld

ITA 288/MUM/2025[2014-15]Status: DisposedITAT Mumbai24 Mar 2025AY 2014-15

Bench: Shri Narender Kumar Choudhry & Shri Prabhash Shankar

For Appellant: Shri Snehal Shah, CAFor Respondent: Shri Hemanshu Joshi, (Sr. DR)

Section 143(3)Section 147Section 148Section 56(2)(viib)Section 68

Tutor Investment and Finance Pvt Ltd, Mumbai vs. DCIT, Central Circle 6(4), Mumbai

In the result, the orders of the ld

ITA 287/MUM/2025[2013-14]Status: DisposedITAT Mumbai24 Mar 2025AY 2013-14

Bench: Shri Narender Kumar Choudhry & Shri Prabhash Shankar

For Appellant: Shri Snehal Shah, CAFor Respondent: Shri Hemanshu Joshi, (Sr. DR)

Section 143(3)Section 147Section 148Section 56(2)(viib)Section 68

Jumbo Distributors Private Limited, Mumbai vs. Deputy Commissioner of Income Tax Circle -1, Kalyan

The appeal is dismissed

ITA 3393/MUM/2024[2016-17]Status: DisposedITAT Mumbai18 Mar 2025AY 2016-17

Bench: Shri Anikesh Banerjee (Jm) & Shri Omkareshwar Chidara (Am) Jumbo Distributors Dict Circle-1 Private Limited 1St Floor 1-6, I-1, Sagar Vs. Mohan Plaza Warehousing Complex Wayle Nagar Nasik Highway Road Khadakpada Ovali Village, Bhiwandi Kalyan West 421 302. 421 301. Pan : Aabcj5567D Appellant Respondent

For Appellant: Ms. Kavitha KaushikFor Respondent: None

been missed out due to over sight but was submitted during the course of assessment proceedings. 3. The Ld. AO has disregarded the valuation of shares without giving any substantial reason and by merely doubting that this report prepared is an afterthought, even though the valuation has been done

Dy Commissioner of Income Tax -8(3)(1), Mumbai vs. M/S Welspun Global Brands Ltd, Mumbai

The appeal of the revenue is partly allowed

ITA 2184/MUM/2022[2012-13]Status: DisposedITAT Mumbai17 Mar 2025AY 2012-13

Bench: Ms Padmavathy S, Am & Shri Raj Kumar Chauhan, Jm

For Appellant: 2.1. Whether on the facts and circumstances of the case and in law, the LdFor Respondent: Shri Asif Karmali, Sr. DR

Section 14ASection 92BSection 92C

completely lost sight of in the impugned order." 32. The other basis in the impugned order is that as a consequence of under valuation of shares there is an impact on potential income. The reasoning is that if the ALP were received, the Petitioner would be able to invest

Tajshree Autowheels Private Limited, Nagpur vs. ACIT Circle-4, Nagpur

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

ITA 400/NAG/2024[2014-15]Status: DisposedITAT Nagpur04 Mar 2025AY 2014-15

Bench: Shri V. Durga Rao & Shri K.M. Roy, Accountant, Member

For Appellant: Shri Madhav VichoreFor Respondent: Shri Abhay Y. Marathe

Section 56(2)Section 56(2)(viib)

assessee–company. On further enquiries 5 Tajshree Autowheels Pvt. Ltd. ITA no.400/Nag./2024 conducted by the Assessing Officer, the assessee provided the valuation of shares as per books of account taking into consideration the year of allotment. The Assessing Officer, taking cognizance of the information/ details furnished by the assessee ... Income Tax Act, 1961 as Income from other sources without providing any opportunity to the assessee to choose the options given for valuation of shares under Rule 11UA during the course of assessment. 8. That the Assessing officer has placed his reliance only on the literal meaning

Eaton Technologies Private Limited, Pune vs. Principal Commissioner of Income Tax, Pune

In the result, the appeal filed by the assessee is allowed

ITA 1160/PUN/2024[2017-18]Status: HeardITAT Pune03 Mar 2025AY 2017-18

Bench: Shri R.K. Panda & Ms. Astha Chandra

For Appellant: Smt. Vishal KalraFor Respondent: Shri Amol Khairnar

Section 10ASection 143(2)Section 143(3)Section 14ASection 263Section 40

enquiry, if the query is not otherwise satisfied while responding to another query. In the instant case, the Assessing Officer raised query regarding valuation of shares in question to which response was only that the unquoted shares were valued at costs. No method of valuation of the shares was submitted

Lalita Ramniranjan Agarwal, Vadodara vs. The Income Tax Officer, Ward-1(2)(4), Vadodara

In the result, the appeal filed by the Assessee is allowed

ITA 662/AHD/2023[2015-16]Status: DisposedITAT Ahmedabad28 Feb 2025AY 2015-16

Bench: Shri TR Senthil Kumar, Judicial Member\nAnd Shri Narendra Prasad Sinha, Accountant Member\nITA No. 662/Ahd/2023\nAssessment Year 2015-16\nLalita Ramniranjan Agarwal,\nB-201, Sandal Wood\nResidency, Urmi Char Rasta\nProductivity Road,\nVadodara-390020\nPAN: AECPA0173J\n(Appellant)\nThe ITO,\nWard-1(2)(4),\nVadodara\nVs\n(Respondent)\nAssessee by: Shri P.M. Jagasheth, A.R.\nRevenue by: Shri Nitin Vishnu Kulkarni, Sr. D.R.\nDate of hearing\n: 24-02-2025\nDate of pronouncement : 28-02-2025\nORD

For Appellant: Shri P.M. Jagasheth, A.RFor Respondent: Shri Nitin Vishnu Kulkarni, Sr. D.R

Section 10(38)Section 143(1)Section 143(3)Section 68

lower it has 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 ... lower it has incurred a business loss of Rs.53,02,455/-, though the shares are not sold. The difference is only because of 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

Nepra Environmental Solutins Private Limited, Gandhinagar vs. The Income Tax Officer, Ward-3(1)(1), Ahmedabad

In the result, the appeal of the assessee is partly allowed

ITA 1683/AHD/2024[2013-14]Status: DisposedITAT Ahmedabad25 Feb 2025AY 2013-14

Bench: Shri T.R. Senthil Kumar & Shri Makarand V. Mahadeokarआयकर अपील सं/Ita No.1683/Ahd/2024 निर्धारण वर्ष / Assessment Year : 2013-14 | Nepra Environmental- Solutions Private Limited 705, Sharan Circle Hub Nr. Sharan Homes, Zundal Gandhinagar 382 421 (Gujarat) स्थायी लेखा सं./Pan: Aaccp 0273 F (अपीलार्थी/ Appellant) Assessee By: Revenue By: | The Income Tax Officer बनाम / | Ward-3(1)(1) V/S. Ahmedabad (प्रत्यर्थी / Respondent) Shri Divyakant Parikh, Ar Shri Santosh Kumar, Sr.Dr सुनवाई की तारीख/Date Of Hearing : 20/02/2025 25/02/2025 घोषणा की तारीख / Date Of Pronouncement: आदेश/Order Per Makarand V. Mahadeokar, Am: This Appeal Has Been Preferred By The Assessee Against The Order Of The Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre [Nfac], Delhi [Hereinafter Referred To As “Cit(A)"], Dated 07-08-2024, For The

For Appellant: Revenue byFor Respondent: The Income Tax Officer

Section 131Section 143(3)Section 56(2)(viib)Section 68

untenable. 7. Without prejudice to the above, both the lower authorities erred in law and on facts in not appreciating that the valuation of shares made as per prescribed method under rule 11UA on the basis of DCF method could not be altered as done by ld AO and hence ... first year of operations and therefore there is no question of any unaccounted income in the hands of the assessee. Regarding the valuation of shares, the AR stated that the assessee followed Rule 11UA(2) and used the DCF method, which is a prescribed valuation method

Vijeta Trading Pvt. Ltd., Mumbai vs. CIT(A), NFAC, Delhi

In the result, the appeal filed by the assessee is dismissed

ITA 206/MUM/2024[2013-14]Status: DisposedITAT Mumbai25 Feb 2025AY 2013-14

Bench: Shri Sandeep Gosain & Shri Prabhash Shankarvs. Cit, (Appeals), Vijeta Trading Pvt. Ltd. Nfac, Office No.64,3Rd Floor Poddar Chambers, 23 Parsi Bazar Street, Fort Mumbai – 4000001. Pan/Gir No. Aabcv1137H (Applicant) (Respondent)

Section 143Section 143(3)Section 250Section 254Section 55A

company because every investor wants to earn income from investment in the form of dividend as well as expects appreciation in the valuation of shares with the growth of business. If this has been the situation, then there would have been no doubt on the genuineness of the transactions

ITO., Ward-16(1), Hyderabad vs. Phoenix Infraventures and Projects Private Limited, Hyderabad

In the result, the appeal filed by the revenue is dismissed

ITA 867/HYD/2024[2022-23]Status: DisposedITAT Hyderabad24 Feb 2025AY 2022-23

Bench: Shri Laliet Kumar, Hon’Ble & Shri G. Manjunatha, Hon’Bleassessment Year: 2022-23 The Income Tax Officer, Vs. Phoenix Infraventures & Projects Private Limited, Ward – 16(1), Hyderabad. Hyderabad. Pan No.Aafcp5499L. (Assessee) (Respondent) Assessee By: Shri R. Mohan Kumar, Advocate Revenue By: Shri B. Bala Krishna, Cit-Dr Date Of Hearing: 24.12.2024 Date Of Pronouncement: 24.02.2025

For Appellant: Shri R. Mohan Kumar, AdvocateFor Respondent: Shri B. Bala Krishna, CIT-DR

Section 139(1)Section 68

investment has been flown to assessee company by filing like Minutes of Board Meetings, Resolution of allotment of shares, and valuation of shares, if any. The Ld.CIT-DR further submitted that the Ld.CIT(A) deleted the addition only on the ground that when the AO is accepting the amount received

Shri Manoj Madanlal Chhajed, Pune vs. The Assistant Commissioner of Income Tax, Central Circle-1(1), Pune

ITA 1178/PUN/2023[2011-12]Status: DisposedITAT Pune19 Feb 2025AY 2011-12

Bench: Shri R. K. Panda & Shri Vinay Bhamore

Section 132Section 132(1)Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 147Section 148

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND SHRI VINAY

ACIT, CC- 18, New Delhi vs. Snerea Properties Pvt. Ltd., New Delhi

Appeals of the Revenue are allowed for statistical purposes

ITA 5181/DEL/2017[2011-12]Status: DisposedITAT Delhi19 Feb 2025AY 2011-12

Bench: Shri Yogesh Kumar Us & Shri Avdhesh Kumar Mishra

Section 148

deal in real estate. Rather than developing the land on its own, the assessee company has sold the land on the basis of valuation of shares during FY 2010-11. This is very clear example of an adventure in nature of trade and the transaction of business activity

JCIT(OSD), Cir-3(1)(2), Ahmedabad vs. Reckitt Benckiser Healthcare (India) Ltd, Haryana

In the result, appeal of the Revenue is dismissed

ITA 1225/AHD/2018[2011-12]Status: DisposedITAT Ahmedabad18 Feb 2025AY 2011-12

Bench: Dr. B.R.R. Kumar, Vice-Ms. Suchitra Kamble

For Appellant: Shri Dhinal Shah, ARFor Respondent: Shri V. Nand Kumar, CIT-DR

Section 115JSection 143(3)Section 2Section 250Section 391Section 45

treated as transfer of capital assets. Accordingly, I agree with the calculation of LTCG as worked out by the A.O. He has taken valuation of shares of Sterling at average amount attributable to shareholders for year ending of 31/3/2011 and 31/3/2010, resulting into average value of shares of Sterling ... treated as transfer of capital assets. Accordingly, I agree with the calculation of LTCG as worked out by the A.O. He has taken valuation of shares of SAIL at average amount attributable to shareholders for year ending of 31/3/2011 and 31/3/2010, resulting into average value of shares of SAIL

Reckitt Benckiser Healthcare India Pvt. Ltd., ( Formerly Known As Reckitt Benckiser Healthcare India Ltd., Haryana vs. DCIT, Circle-3(1)(2), Ahmedabad

In the result, appeal of the Revenue is dismissed

ITA 1184/AHD/2018[2011-12]Status: FixedITAT Ahmedabad18 Feb 2025AY 2011-12

Bench: Dr. B.R.R. Kumar, Vice-Ms. Suchitra Kamble

For Appellant: Shri Dhinal Shah, ARFor Respondent: Shri V. Nand Kumar, CIT-DR

Section 115JSection 143(3)Section 2Section 250Section 391Section 45

Deputy Commissioner of Income Tax, Circle-11(1), Kolkata vs. Soudamini Investments Private Limited, Kolkata

In the result, the appeal ITA No

ITA 1453/KOL/2023[2016-17]Status: DisposedITAT Kolkata17 Feb 2025AY 2016-17

Bench: ITAT, Kolkata were collected and prepared. 2nd Appeal was e-filed

Section 148Section 148ASection 250

rejecting the valuation of the shares determined by the Assessing Officer as per rule 11UA of the IT Rule, 1962 and accepting the valuation of shares adopted by the assessee without any verification? 2. That the appellant craves leave to add any new ground or alter or amend

Dhas Kishor Ramchandra, Aurangabad vs. Dwarkaprasad Bhikulal Soni, Jalna

In the result, the appeal filed by the Revenue stands dismissed

ITA 1188/PUN/2024[2021-22]Status: DisposedITAT Pune14 Feb 2025AY 2021-22

Bench: SHRI R. K. PANDA (Vice President), SHRI VINAY BHAMORE (Judicial Member)

For Appellant: Shri Anand PartaniFor Respondent: Shri Amol Khairnar

Section 132(4)Section 50CSection 56(2)(x)Section 69C

Finance Act 2020 keeping in mind the practical difficulties and uncertainties while calculating the fair value. 5.2.7 Similarly as regards to the valuation of shares under rule 11UA, over the period, valuation method has changed from Net asset valuation method to Discounted Cash Flow method. On 25th September ... used weighted average of DCF, NAV and NAV of market value to determine the value of equity shares for calculation of fair valuation of shares. The same is most appropriate and in accordance with law and regulations accepted by the various statues and bodies which is most perfect to estimate

ACIT, Circle-2(1), Hyderabad vs. Y S Jagan Mohan Reddy, Kadapa

In the result, cross objection filed by the assessee is

ITA 670/HYD/2022[2011-12]Status: DisposedITAT Hyderabad12 Feb 2025AY 2011-12

Bench: Shri Manjunatha G. & Shri K.Narasimha Chary

For Appellant: Shri C.A.Vijay Mehta, ARFor Respondent: Ms.M.Narmada, CIT-DR and

Section 132Section 56(1)(vii)

entities namely M/s 2i Capital PCC and M/s Emerging Star Fund PCC by directing the Assessing Officer to follow the provisions relating to valuation of shares. 8. The CIT(A) failed to appreciate the fact that as per the information obtained from Mauritius tax authorities, both the entities were pass