Case Law Details
PNP Maritime Services Pvt. Ltd. Vs DCIT (ITAT Mumbai)
Recent Mumbai Tribunal Ruling Affirms Validity of Valuation Report by Certified Valuers in Angel Tax Cases
In a significant update on the Angel Tax front, the Mumbai Tribunal has pronounced a ruling emphasizing the legitimacy of fair market valuation conducted under Section 56(2)(viib) of the Income-tax Act, 1961 (Angel-tax Provisions). The judgment establishes that shares issued at a premium based on a valuation using the Discounted Cash Flow (DCF) Method by a certified valuer cannot be rejected by tax officers unless valid grounds are presented. this has been decided by court in the case of PNP Maritime Services (P.) Ltd. v. Deputy Commissioner of Income-tax, Circle-3(2)(2) [2023] 157 taxmann.com 517 (Mumbai – Trib.)[19-12-2023].
Key Facts of the Case:
1. PNP Maritime Services Pvt. Ltd. (“the taxpayer”), a company specializing in port and port-related logistics services, issued shares to a specific investor at a premium.
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