ITAT Kolkata – Addition U/s 56(2)(viib) Deleted; AO Cannot Replace Assessees DCF Valuation with NAV Method

Brajbhumi Nirmaan Private Limited Vs ITO (ITAT Kolkata) In Brajbhumi Nirmaan Pvt. Ltd. (AY 2015-16), the AO taxed ₹10.21 Cr as excess share premium u/s 56(2)(viib) by rejecting the assessee’s DCF valuation and substituting it with NAV based on book values. The assessee had issued shares at ₹189.40 per share supported by a DCF valuation report for a real estate project funded by existing promoters. The ITAT held that under Rule 11UA the assessee has the option to adopt the DCF method, and while the AO may scrutinize the assumptions, he cannot change the valuation method itself. DCF projec...