“DCF method”

Special Rate ProvisionsRule 11UARule 11UA318 judgments

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

Leading authorities on DCF method

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.

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.

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.

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.

Agro Portfolio (P.) Ltd. v. ITO

94 Taxmann.com 112 · 2018 · High Court

citing judgments

The Assessing Officer (AO) has the power to disturb the valuation of shares provided by the assessee's chartered accountant, even if Rule 11UA(2) is followed. If the AO doubts the valuation report, they are not necessarily bound to refer the matter to the Valuation Officer and can adopt a different method to determine the fair market value.

Cinestaan Entertainment (P) Ltd. v. ITO

106 Taxmann.com 300 · 2019 · High Court

citing judgments

An Assessing Officer must accept the fair market value of shares determined by the assessee using a prescribed method like DCF or NAV, and cannot substitute their own valuation, as Section 56(2)(viib) is a deeming provision not open to broad interpretation.

Agro Portfolio Pvt. Ltd. v. ITO

171 ITD 74 · 2018 · ITAT

citing judgments

The Assessing Officer can scrutinize the valuation report submitted by an assessee and may, if necessary, determine a fresh valuation using the Discounted Cash Flow (DCF) method, even if the assessee opted for a different method, provided the assessee fails to substantiate their projections.

Pr. Commissioner of Income Tax-2 v. Enrich Agro Food Products Pvt. Ltd.

148 Taxmann.com 26 · 2023 · High Court

citing judgments

The Delhi High Court confirms that when shares are issued at a premium to investors, the valuation of such shares must be assessed based on established methods like the NAV or DCF method, and the revenue cannot arbitrarily determine the fair market value.

Judgments citing DCF method

Beetle Ventures Pvt. Ltd, Mumbai vs. ACIT 16(2), Mumbai

In the result, appeal filed by the assessee is allowed

ITA 836/MUM/2022[2015-16]Status: DisposedITAT Mumbai01 Dec 2022AY 2015-16

Bench: Shri Amit Shukla, Hon'Ble & Shri S. Rifaur Rahman, Hon'Blem/S. Beetle Ventures Private Limited V. Acit – 16(2) Unit No. 155 Room No. 440, 4Th Floor Shah & Nahar Industrial Estate Aayakar Bhavan, M.K. Road S.J. Marg, Lower Parel (W) Mumbai - 400020 Mumbai - 400013 Pan: Aafcb9355H (Appellant) (Respondent) Assessee Represented By : Shri Jayesh Dadiya Department Represented By : Shri Chetan M. Kacha

Section 142(1)Section 143(1)Section 143(2)

ITAT-Jaipur) "4.5.2. Before examining the fairness or reasonableness of valuation report submitted by the assessee we have to bear in mind the DCF Method and is essentially based on the projections (estimates) only and hence these projections cannot be compared with the actuals to expect the same figures ... notice from the records that assessee has issued rights shares to its shareholders with share premium after duly valuing the shares based on DCF method and the valuation was done by a merchant banker. At the time of assessment proceedings, assessee has submitted valuation report and the AO verified

Asst CIT Cir. 15(1)(2), Mumbai vs. M/S Dpn Reality Deals Pvt Ltd., Navi Mumbai

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

ITA 1347/MUM/2020[2016-17]Status: DisposedITAT Mumbai31 Oct 2022AY 2016-17

Bench: Shri Aby T. Varkey, Jm & Shri Amarjit Singh, Vp आयकर अपील सं/ I.T.A. No.1347/Mum/2020 (निर्धारण वर्ा / Assessment Years: 2016-17) Acit, Circle-15(1)(2) बिधम/ M/S. Dpn Reality Deals Room No. 483A, 4Th Floor, Pvt. Ltd. Vs. Aayakar Bhavan, Mumbai- Unit No. 4, Building No. 400020. 2, Sector-1, Millenium Business Park Mahape, Navi Mumbai-400710. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Aaacy6576C (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: Shri Saurabh Bhat Revenue By: Smt. Riddhi Mishra (Dr) सुनवाई की तारीख / Date Of Hearing: 19/10/2022 घोषणा की तारीख /Date Of Pronouncement: 31/10/2022 आदेश / O R D E R Per Aby T. Varkey, Jm: This Is An Appeal Preferred By The Revenue Against The Order Of The Ld. Commissioner Of Income Tax (Appeals) -24, Mumbai [Hereinafter Referred To As The “Cit(A)”] Dated 18.11.2019 For Ay. 2016-17. 2. The Grounds Of Appeal Of The Revenue Reads As Under: - “1. On The Facts & In The Circumstances Of The Case & In Law, The Ld. Cit(A) Has Erred In Allowing The Appeal & Deleting The Additions Of Rs.19,46,21,075/- Made U/S 56(2)(Viib) Of The Act. 2. The Appellant Prays That The Order Of The Ld. Cit(A) On The Above Ground Be Set Aside & That Of The Ao Be Restored.”

For Appellant: Shri Saurabh BhatFor Respondent: Smt. Riddhi Mishra (DR)

Section 56(2)(viib)

hereinafter “the Rules”) and accordingly the fair market value of the share was calculated at Rs.525/- on the basis of discounted cash Flow Method (DCF Method). The AO show-caused the assessee vide notice dated 19.12.2018 as to why the DCF method adopted by the assessee company for valuation ... valuation report, the figures have been put up without giving any reasons, as to how these assumptions have been made. 1. In the DCF method first step is to forecast expected cash flow based on assumptions regarding the company's revenue growth rate, net operating profit margin, income tax rate

Sb Industrial Engineering Pvt Ltd., Chennai vs. ACIT Corporate Circle 6(1), Chennai

In the result, the appeal of the Assessee in I

ITA 861/CHNY/2019[2015-16]Status: DisposedITAT Chennai19 Oct 2022AY 2015-16

Bench: Shri Mahavir Singhand Shri G. Manjunatha

For Appellant: Mr. T. Shanmugam, AdvocateFor Respondent: Mr. P. Sajit Kumar, JCIT

Section 143(3)Section 56(2)(vii)

Assessing Officer however was not convinced with the explanation furnished by the Assessee, as according to the Assessing Officer, the Discounted Cash-Flow [DCF] Method adopted by the Assessee for valuation of shares is not correct and thus rejected the DCF Method and had adopted the Net Asset Value ... valuation report and as per which the Assessee has determined the share price at Rs.107.95 per share under the Discounted Cash-Flow [DCF] Method. :: 4 :: I.T.A. No.861/Chny/2019 5. The ld.CIT(A) after considering the relevant submissions and also after going through the case-laws relied upon and also certain judicial

S.A. Metro Plots Pvt. Ltd., Chennai vs. ITO, Corporate Ward - 6 (1), Chennai

The appeal stands partly allowed for statistical purposes

ITA 1909/CHNY/2019[2015-16]Status: DisposedITAT Chennai19 Oct 2022AY 2015-16

Bench: Hon’Ble Shri Mahavir Singh & Hon’Ble Shri Manoj Kumar Aggarwal, Am

For Appellant: Shri G. Sivasubramanian (CA) – Ld. ARFor Respondent: Shri P. Sajit Kumar (JCIT) –Ld. DR

Section 142ASection 143(3)Section 56Section 56(2)(viib)

adopt a particular method of valuation, the assessing officer has no power to change the method of valuation. Accordingly the Assessee has adopted DCF method of valuation while valuing the shares. The learned CIT (Appeal) has failed to appreciate that the Assessing officer has no jurisdiction to change the method ... agreement dated 23.02.2012. The assessee also filed valuation report of a Chartered Accountant valuing the shares at Rs.1540/- per share adopting Discounted Cash Flow (DCF) method. In support, the assessee filed net cash flow statement and discounted cash flow. However, the details of net cash flow and basis for arriving

Reliance Industries Ltd., Mumbai vs. Asstt. CIT-CC-3(4), Mumbai

In the result, appeal by the Revenue is dismissed

ITA 579/MUM/2021[2016-17]Status: DisposedITAT Mumbai14 Oct 2022AY 2016-17

Bench: Shri Pramod Kumar, Vice Preside & Shri Sandeep Singh Karhail

For Appellant: Shri Nimesh Vora a/wFor Respondent: Shri Chetan M. Kacha, Sr. AR

Section 115JSection 143Section 144C(3)Section 14ASection 250Section 250(6)Section 32Section 92CSection 92C(3)

calendar year 2010 to 2015 and as such the share value under NAV is negative and even if it is to be valued under DCF method based on RBI's Circular for outbound shares, the actual cash flows during these years are negative and so its value would be negative

ACIT -3(4), Mumbai vs. Reliance Industries Ltd, Mumbai

In the result, appeal by the Revenue is dismissed

ITA 1438/MUM/2021[2016-17]Status: DisposedITAT Mumbai14 Oct 2022AY 2016-17

Bench: Shri Pramod Kumar, Vice Preside & Shri Sandeep Singh Karhail

For Appellant: Shri Nimesh Vora a/wFor Respondent: Shri Chetan M. Kacha, Sr. AR

Section 115JSection 143Section 144C(3)Section 14ASection 250Section 250(6)Section 32Section 92CSection 92C(3)

Infiniti Wholesale Ltd ( Formerly Knwon As Woolwonths Wholesale (India) P.Ltd), Mumbai vs. Asst CIT Cir 8(3), Mumbai

In the result, appeal filed by the Appellant is partly allowed

ITA 7718/MUM/2012[2008-09]Status: DisposedITAT Mumbai13 Oct 2022AY 2008-09

For Appellant: Shri Nitesh JoshiFor Respondent: Michael Jerald

Section 143(3)Section 144CSection 144C(5)Section 92C

their contention that either the valuation done by the chartered engineer, or the value accepted by the custom authorities, or the value derived by DCF method could be considered for a determination of the ALP. Ld. DRP considered the details furnished by the assessee as per these 3 valuations namely ... valued by the chartered engineer, are as valued by the customs 13 Assessment Year: 2008-09 authorities, or as valued by following the DCF method and having done all this exercise DRP reach the conclusion that the method adopted by the Assessing Officer is not an acceptable

ITO Corporate Ward 4(3), Chennai vs. Kaino Infra Development Private Ltd., Chennai

In the result, appeal filed by the Revenue is dismissed

ITA 1491/CHNY/2019[2015-16]Status: DisposedITAT Chennai12 Oct 2022AY 2015-16

Bench: Shri V. Durga Rao & Shri G. Manjunathaआयकर अपीलसं./I.T.A.No.1491/Chny/2019 ("नधा"रणवष" / Assessment Year: 2015-16) The Income Tax Officer, Vs M/S. Kaino Infra Development Corporate Ward-4(3) Pvt Ltd., Chennai-34. 37, Ttk Road, Alwarpet, Chennai-600 018. Pan: Aadcr 5655E (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ"क"ओरसे/ Appellant By : Mr. Ar V Sreenivasan, Addl.Cit For Mr. V.Vikekananthan, Cit ""यथ"क"ओरसे/Respondent By : Mr. G.Seetharaman, C.A. & Mr.S.Sundararaman, C.A सुनवाईक"तार"ख/Date Of Hearing : 15.07.2022 घोषणाक"तार"ख /Date Of Pronouncement : 12.10.2022 आदेश / O R D E R Per G. Manjunatha, Am: This Appeal Filed By The Revenue Is Directed Against The Order Of The Learned Commissioner Of Income Tax (Appeals)-8, Chennai Dated 31.01.2019 & Pertains To Assessment Year 2015-16. 2. The Revenue Has Raised Following Grounds Of Appeal:- “1. The Order Of The Ld.Cit(A) Is Contrary To Law & Facts Of The Case. 2. The Ld.Cit(A) Erred In Allowing The Assessee'S Appeal By Stating That The Assessee Company Has Sufficiently & Reasonably Justified The Share Premium Received Of Rs.168.60 Crores For The Year.

For Appellant: Mr. AR V Sreenivasan, Addl.CIT for Mr. V.Vikekananthan, CITFor Respondent: Mr. G.Seetharaman, C.A. &

Section 56(2)(vii)

premium of Rs.168 crores. The assessee further submitted that the company has justified allotment of shares with premium by valuation of company shares under DCF method as per Rule 11UA of Income tax Rules, 1962. The assessee has also 6 justified allotment of shares at premium with the help ... partnership firm and if you consider possible revenue generation from the project, cash flow projections considered by the assessee for valuation of shares under DCF method is much below intrinsic value of share capital held by the assessee in partnership firm. Therefore, submitted that allotment of equity shares with premium

Deputy Commissioner of Income Tax Central Circle-2(3), Bangalore vs. M/S Bioworth India Private Limited, Kolkata

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

ITA 679/BANG/2019[2010-11]Status: DisposedITAT Bangalore12 Oct 2022AY 2010-11

Bench: Smt. Beena Pillai & Shri Laxmi Prasad Sahuassessment Year : 2010-11

For Appellant: Shri Akkal Dudhewala, C.A by RevenueFor Respondent: Shri K Sankar Ganesh, JCIT (DR) by

Section 133(6)Section 37

himself or by calling for a final determination from an independent valuer to confront the petitioner. However, the basis has to be the DCF method and it is not open to him to change the method of valuation which has been opted for by the Assessee." Following the said judgment ... Payment Solutions Pvt. Ltd. v. ITO [ITS-4-ITAT-2019] wherein it was held that if the assessee has opted for DCF method, the AO cannot discard it and adopt another method, but the AO can only challenge underlying assumptions, if he is not satisfied with the same, and suggest

DCIT 1(1)(2), Mumbai vs. Green Infra Ltd, Mumbai

In the result, appeal by the Revenue is dismissed

ITA 7529/MUM/2016[2012-13]Status: DisposedITAT Mumbai26 Sept 2022AY 2012-13

Bench: Shri Om Prakash Kant & Shri Sandeep Singh Karhail

For Appellant: Shri Vartik ChoksiFor Respondent: Shri Ashok Kumar Kardam

Section 250Section 260ASection 56(1)Section 61Section 78(2)

submissions of the assessee and held that the assessee company has shown consistent losses and in such a scenario the valuation done by adopting DCF method without considering the income tax liability of the preceding year, which is confirmed and crystallized in appellate proceedings is meaningless. The Assessing Officer further

M/S. Ukn Properties Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle-7(1)(1), Bangalore

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

ITA 1739/BANG/2019[2013-14]Status: DisposedITAT Bangalore16 Sept 2022AY 2013-14

Bench: Shri N.V. Vasudevan & Ms. Padmavathy Sassessment Year : 2013-14

For Appellant: Shri Narendra Sharma, AdvocateFor Respondent: Shri V S Chakrapani, CIT(DR)(ITAT), Bengaluru

Section 143(2)Section 14ASection 56(2)(vii)

valuation report given by the Chartered Accountant (pg. 67 & 71 of PB) for making the addition which is based on Discounted Cash Flow [DCF] method. The ld. AR further submitted that the DCF method is not the permissible method of valuation for the purpose of section 56(2)(viia ... Rule 11UA(1)(c)(b). We notice that the AO has relied on the valuation report given by the CA which is based on DCF method for making the addition in the hands of the assesse u/s. 56(2)(viia). The DCF method is not the prescribed method of valuation

M/S. Waterline Hotels Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle- 7(1)(2), Bangalore

In the result, the appeal by the assessee is allowed

ITA 388/BANG/2020[2013-14]Status: DisposedITAT Bangalore13 Sept 2022AY 2013-14

Bench: Shri N.V. Vasudevan & Ms. Padmavathy Sassessment Year : 2013-14 Waterline Hotels Pvt. Ltd., Vs. The Deputy Commissioner 10Th Floor, Gamma Block, Of Income Tax, Sigma Soft Tech Park No.07, Circle 7(1)(2), Airport Varthur Road, Bangalore. Whitefield, Bangalore – 560 066. Pan: Aaacw 8059N Appellant Respondent Appellant By : Shri Pranav Krishna, Advocate Respondent By : Shri V S Chakrapani, Cit(Dr)(Itat), Bengaluru. Date Of Hearing : 29.08.2022 Date Of Pronouncement : 13.09.2022 O R D E R Per Padmavathy S.This Appeal By The Assessee Is Against The Order Of The Cit(Appeals)-7, Bengaluru Dated 27.3.2019 For The Assessment Year 2013-14. 2. The Assessee Has Raised 18 Grounds Pertaining To The Following Issues:- Page 2 Of 20

For Appellant: Shri Pranav Krishna, AdvocateFor Respondent: Shri V S Chakrapani, CIT(DR)(ITAT), Bengaluru

Section 143(2)Section 271Section 40Section 56(2)(viib)

course of assessment, the AO noticed that the assessee has issued shares at a premium based on the valuation done using Discounted Cash Flow [DCF] method as certified by a Chartered Accountant. The AO rejected the method of valuation quoting various reasons and arrived at the valuation based on Fair ... premium. The assessee filed the valuation report in which the fair Page 6 of 20 market value of the shares are arrived at using DCF method at Rs.208.58 given by a Chartered Accountant. The AO rejected the valuation report by stating that – i. Valuation under DCF method is not acceptable

Paath Financial Services Pvt Ltd., Mumbai vs. ITO 15 (1)(4), Mumbai

ITA 6833/MUM/2019[2015-16]Status: DisposedITAT Mumbai05 Sept 2022AY 2015-16

For Appellant: Mr.Poojan Mehta.ARFor Respondent: Mr.Soumendu Kumar

Section 143(1)Section 143(2)Section 143(3)Section 68

working of discounted free cash flow (DCF). The assessee has submitted the details vide letter dated 11.12.2017 mentioning that the certificate as per DCF method has been issued considering the future business and profitability of the company and Paath Financial Services Pvt Ltd, Mumbai. the company has done the good ... Rheinland NIFE Academy Pvt Ltd., held that the assessee was unable to substantiate the projections based on which the value was determined using the DCF method and the very basis for the DCF valuation does not hold good. Hence, considering the facts that the A.O. has rightly rejected the valuation

Deputy Commissioner of Income Tax Central Circle-4(1), Central Range-4, Mumbai vs. M/S.Runwal Projects Private Limited, Mumbai

Accordingly, the additions in all the 3 assessment years deleted by Ld. CIT (A) are confirmed and the grounds raised by the revenue are dismissed

ITA 5970/MUM/2017[2009-10]Status: DisposedITAT Mumbai30 Aug 2022AY 2009-10

Bench: Shri Amit Shukla, Jm & Shri S. Rifaur Rahman, Am 1. आयकरअपीलसं./ I.T.A. No. 5970/Mum/2017 (ननधधारणवर्ा / Assessment Year: 2009-10) 2. आयकरअपीलसं./ I.T.A. No. 634/Mum/2018 (ननधधारणवर्ा / Assessment Year: 2010-11) 3. आयकरअपीलसं./ I.T.A. No. 6027/Mum/2017 (ननधधारणवर्ा / Assessment Year: 2012-13)

For Respondent: Shri Jayant Jhaveri, Ld. DR

Section 132Section 139Section 143(3)Section 68

yielded huge dividend /profit from such investment, which shows that the premium on the shares stands justified and the valuation done on the DCF method by the Approved Valuer was correct. Accordingly, the aforesaid finding incorporated by the Ld. CIT(A) is confirmed as same is not only correct appreciation

Rakyan Beverages Private Limited, Raigarh vs. ACIT 5(3)(1), Mumbai

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

ITA 120/MUM/2022[2018-19]Status: DisposedITAT Mumbai24 Aug 2022AY 2018-19

For Appellant: Shri J. D. Mistry & MadhurFor Respondent: Shri Prakash Mane (DR)

Section 68

conformity with 9 A.Y. 2018-19 Raw Pressery Pvt. Ltd. the valuation report obtained from Chartered Accountant under the Discounted Cash Flow Method (‘DCF Method’) as set out in Rule 11UA, as it stood then, in AY 2018-19. Even otherwise, inviting our attention to the provisions of Section ... value of the equity shares, it is noted that the assessee has supported the valuation with a certificate issued by a chartered accountant using DCF method which is one of approved method as prescribed by RBI. The tax-payer while issuing shares to non-resident investors create an foreign obligation

Hira Technologies Private Limited, Pune vs. Pr Commissioner of Income Tax -8 Mumbai, Mumbai

In the result, appeal of the assessee is allowed

ITA 873/MUM/2022[2016-17]Status: DisposedITAT Mumbai27 Jul 2022AY 2016-17

Section 263Section 68

paper book. The assessee had also furnished independent Chartered Accountant valuation certificate justifying the issue of shares at a premium using DCF method. The ld. AR argued that all these documents collectively prove that the share holders have sufficient creditworthiness to make investment in assessee company. Further, the shareholders

DCIT - 1(3)(2), Mumbai vs. Unique Land Realty Pvt. Ltd, Mumbai

ITA 3531/MUM/2019[2014-15]Status: DisposedITAT Mumbai15 Jul 2022AY 2014-15

Section 133(6)Section 56(2)(viib)Section 68

report, has followed “Discounted free cash flow method” (DCF) for valuing the value of shares. (b) However, provisions of rule 11UA do not prescribe DCF method for valuing preference shares. The DCF method of valuation has been prescribed for valuing ‘equity shares’ only. Accordingly, the Assessing Officer took the view

M/S Majju Image & Brand Consultants Pvt Ltd, Bangalore vs. The Principal Commissioner of Income Tax, Bangalore

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

ITA 2015/BANG/2018[2014-15]Status: DisposedITAT Bangalore14 Jul 2022AY 2014-15

Bench: Shri Chandra Poojari & Smt. Beena Pillaiassessment Year : 2014-15 M/S. Majju Image & Brand Consultants Pvt. Ltd., The Pr. No. G1, Accolade Commissioner Of Apartments, Income Tax, Millers Road, 2Nd Cross, Bangalore – 4, Benson Town, Vs. Bangalore. Bangalore – 560 046. Pan: Aaicm6586E Appellant Respondent : Shri B.S. Balachandran, Assessee By Advocate : Shri Sumer Singh Meena, Revenue By Cit-Dr Date Of Hearing : 14-07-2022 Date Of Pronouncement : 14-07-2022 Order Per Beena Pillaipresent Appeal Is Filed By Assessee Against Order U/S. 263 Dated 25/01/2018 Passed By Ld.Pr.Cit, Bangalore – 4 For A.Y. 2014-15 On Following Grounds Of Appeal: “1. The Impugned Revisionary Order Passed By The Learned Principal Commissioner Of Income-Tax (Pcit) U/S.263 Dated; 25-01-2018 Is Opposed To The Facts Of The Case & The Law & Therefore, It Is Liable To Be Set-Aside.

For Respondent: Shri B.S. Balachandran

Section 142(1)Section 143Section 143(3)Section 263

future cash flow as certified by the management. No verification of projections and assumptions adopted by management was made by the auditor. In DCF method, future free cash flow is the most relevant variable which can change the value to any extent. The revenues are estimated at high values without ... basis. Such exorbitant estimated free cash flow was used in valuing shares by DCF method. Therefore, it is clear that valuation made on the basis of unverified exorbitant FCF given by management has given unjustifiable value of shares @ Rs. 1,662/-. This is not as per recognized DCF method

Dy CIT. Circle-1, Thane vs. M/S Travecom Global P. Ltd., Bhayander

In the result, appeal filed by the Revenue is dismissed

ITA 59/MUM/2021[2016-17]Status: DisposedITAT Mumbai28 Jun 2022AY 2016-17

Bench: Shri Aby T. Varkey, Hon'Ble & Shri S. Rifaur Rahman, Hon'Bledcit – Circle 1 V. M/S. Travecom Global Pvt. Ltd., Room No. 22, B-Wing B/607, Krishnakunj 6Th Floor, Ashar I.T. Park Salasar Brij Bhoomi Wagle Industrial Estate Bhayander (W)-401101 Thane (W)-400604 Pan: Aaect8729Q (Appellant) (Respondent) Assessee By : Ms. Aarti Vissanji Department By : Shri B.K. Bagchi

For Appellant: Ms. Aarti VissanjiFor Respondent: Shri B.K. Bagchi

Section 143(2)Section 56(2)(viib)

support of the above valuation assessee has filed valuation report from the Chartered Accountant. Assessing Officer observed that FMV is determined as per DCF Method and on perusal, he noticed that the FMV has been determined on the basis of projection of Cash-Flow w.e.f. 2016 to 2021. The Assessing ... assessee for A.Y.2018-19 wherein, sales are shown at ₹.Nil. The Assessing Officer observed that assessee has issued shares on premium by adopting DCF method and also the valuation report was based on projected cash flow. Accordingly, the assessee estimated the valuation of the shares and issued the same on premium

Hitesh Chhatwal, Mumbai vs. DCIT CC -5(4), Mumbai

In the result, the appeals of the assessee are allowed while for the appeal of the revenue are dismissed

ITA 6418/MUM/2019[2011-12]Status: DisposedITAT Mumbai24 Jun 2022AY 2011-12

Bench: Shri Pavan Kumar Gadale & Shri Amarjit Singh

For Appellant: Mani JainFor Respondent: Vinay Sinha

Section 54F

fees as against Rs.8,37,77,777/considered by the assessing officer. It is also held that the assessing officer is not justified in rejecting DCF method applied for valuation of shares. Grounds of appeal nos. 3 to 6 are partly allowed as above. 4. During the course of appellate proceedings