2018 (8) TMI 1198

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..... appropriate method of valuation of shares of the assessee in the facts & circumstances and the nature of industry in which the assessee operated. - Decided in favor of assessee for statistical purposes.
SHRI N.V. VASUDEVAN, JUDICIAL MEMBER For The Appellant : Shri H.N. Khincha, CA For The Respondent : Shri K.N. Dhandapani, Jt.CIT(DR)(ITAT), Bengaluru ORDER This is an appeal by the assessee against the order dated 09.03.2018 of the CIT(Appeals). Bengaluru-6, Bengaluru relating to assessment year 2014-15. 2. The assessee is a private limited company. The assessee was incorporated on 4th December, 2012. The assessee is a Software Company engaged in the business of technology service and platform organization. The assessee provides ser .....

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..... Assessing Officer rejected the discounted cash flow method and arrived at the value of share by Net Asset Value (NAV) method and arrived at the value of 1.17 per share and the difference of ₹ 1.64 (2.81 - 1.17) per share amounting to ₹ 58,45,806/- is added by applying section 56(2)(viib) of the Income Tax Act, 1961 ["the Act"]. 6. The discounted cash flow method was rejected by the Assessing Officer on the ground that the; (a) valuation is not credible: (b) the figures given in the report do not tally with actuals; (c) no basis is given for the projected figures; (d) growth rate is taken as 5.17% have no factual basis: (e) the report is justified based on the details given by the management. 7. Aggrieved by the above .....

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..... and appropriate to set aside the order of CIT(Appeals) and direct the CIT(A) to consider those submissions. 10. The ld.DR while relying on the order of CIT(Appeals), filed before me a copy of the ITAT Delhi Bench decision in the case of Agro Portfolio (P) Ltd. v. ITO, [2018] 94 taxmann.com 112 (Delhi-Trib.) wherein the Tribunal took the view that NAV method is a better method of valuation of unquoted shares. 11. I have considered the rival submissions and I am of the view that the order of CIT(Appeals) should be set aside and CIT(Appeals) should be directed to examine the reasons given by the assessee as to why DCF method was the most appropriate method of valuation of shares of the assessee in the facts & circumstances and the nature of .....

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