Case Law Details
DCIT Vs HolisolLogistrics P. Ltd. (ITAT Delhi)
ITAT Delhi held that assessee has option to choose any of the method i.e., ‘book value method’ or ‘discounted cash flow method’ to the Assessee for determining the value of its shares. The valuation so arrived by the expert under Discounted Cash Flow Method providing necessary basis of computation of projection needs to be accepted.
Facts-
The Assessee adopted the DCF method on the basis of report determining the fair market value by Accountant as per the discounted free cash flow method. While perusing the said report, the Assessing Officer observed that in the said report, the figures adopted for the F.Y. 2014-15 and 2015-16 do not match with the actual performance of the company and therefore, the said report cannot be relied upon. The premium in excess to the book value has been brought to tax by the AO, as income u/s. 56(2)(viib). AO further held that there is huge mismatch between the PAT adopted as per the report and the actual. Even the non-cash cost adopted by the Accountant for determining the fair market value is also not acceptable. The Commissioner on appeal allowed the contention raised by the Assessee and deleted the addition. Being aggrieved, revenue has preferred the present appeal.
Conclusion-
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
