Addition u/s 56(2)(viib) Invalid as AO Cannot Reject DCF Valuation Without Defects: ITAT Delhi

ITO Vs Ecosphere Agrofarms Pvt. Ltd. (ITAT Delhi) The ITAT Delhi held that additions under Section 56(2)(viib) on share premium were unjustified where the assessee had adopted the Discounted Cash Flow (DCF) method for valuation and furnished a valid valuation report. The Assessing Officer (AO) had rejected the valuation primarily due to lack of supporting details for projections and differences between projected and actual results. However, the Tribunal observed that the assessee had provided necessary documents, including feasibility reports, and the AO failed to identify any specific defect ...