AO Cannot Replace DCF with NAV Without Pointing Defects in Assessee’s Valuation: ITAT Chennai

Asirvad Micro Finance Pvt. Ltd. Vs DCIT (ITAT Chennai) The Income Tax Appellate Tribunal (ITAT), Chennai, considered an appeal against an order of the Commissioner of Income Tax (Appeals) for Assessment Year 2015–16 concerning an addition made under Section 56(2)(viib) of the Income Tax Act, 1961. The assessee, engaged in microfinance business, had issued rights shares at a premium of Rs. 73.32 per share to another non-banking financial company. The valuation was determined using the Discounted Cash Flow (DCF) method, as permitted under the rules, and supported by a Chartered Accountant’s ...