DCF Valuation Cannot Be Rejected Using Hindsight – ITAT Deletes ₹36.54 Crore Section 56(2)(viib) Addition

Catwalk Worldwide Limited Vs ACIT (ITAT Mumbai) The Mumbai ITAT deleted a massive addition of ₹36.54 crore made under section 56(2)(viib), holding that once an assessee adopts a prescribed valuation method under Rule 11UA — such as the Discounted Cash Flow (DCF) method — the Assessing Officer cannot discard it merely because actual future performance differs from projections. The assessee had issued shares at a premium of ₹518 per share based on a DCF valuation report prepared by a Chartered Accountant valuing shares at ₹536.17 each. The AO rejected the valuation after comparing proj...