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TMI Blog2020 (7) TMI 128X X X X Extracts X X X X X X X X Extracts X X X X ..... o.1670/Bang/2019 - - - Dated:- 3-7-2020 - Shri A. K. Garodia, Accountant Member And Shri Pavan Kumar Gadale, Judicial Member For the Assessee : Shri. V. Srinivasan, Advocate For the Revenue : Smt. R. Premi, JCIT (DR)(ITAT), Bengaluru ORDER PER A. K. GARODIA, AM: This appeal is filed by the assessee and the same is directed against the order of learned CIT(A)-1, Bhubaneswar, dated 10.05.2019 for Assessment Year 2015-16. The grounds raised by the assessee are as under: 1. The orders of the authorities below in so far as they are against the appellant are opposed to law, equity, weight of evidence probabilities, facts and circumstances of the appellant's case. 2. The learned CIT[A] is not justified in upholding the addition made u/s. 56[2] [viib] of the Act to the extent of ₹ 30,99,600/- in respect of the equity and preference shares allotted to residents at a premium of ₹ 800 per share on the ground that the consideration received by the appellant for allotment of these shares exceeded the fair market value of the shares under the facts and in the circumstances of the appellant's case. 3. The learned CIT[A] ought to have a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. Without prejudice to the right to seek waiver before the Hon'ble DG/CCIT, the appellant denies itself liable to be charged to interest u/s. 234A, 234-B and 234-D of the Act, which requires to be cancelled under the facts and in the circumstances of the appellant's case. 2. In the course of hearing, it was submitted by learned AR of the assessee that although various grounds are raised by the assessee but the only issue involved in this appeal is regarding the addition made by the AO of ₹ 30,99,600/- under sections 56(2)(viib) of the Income Tax Act, 1961 in respect of equity and preference shares allotted by assessee to various residents at a premium of ₹ 800 per share and this is the allegation of the AO that the consideration received by the assessee for allotment of these shares exceeded the fair market value of the shares. He placed reliance on the Tribunal order rendered in the case of M/s. VBHC Value Homes Pvt. Ltd., Vs. ACIT in ITA No. 2541/Bang/2019 dated 12.06.2020 and he submitted a copy of this Tribunal order and pointed out that in para 9 of this Tribunal order, the Tribunal has reproduced the relevant portion of another Tribunal order rendered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal order cited by learned AR of the assessee having been rendered in the case of Innoviti Payment Solutions Pvt. Ltd., Vs. ITO (supra). These paras are as follows: 11. As per various tribunal orders cited by the learned AR of the assessee, it was held that as per Rule 11UA (2), the assessee can opt for DCF method and if the assessee has so opted for DCF method, the AO cannot discard the same and adopt other method i.e. NAV method of valuing shares. In the case of M/s. Rameshwaram Strong Glass (P) Ltd. vs. The ITO (Supra), the tribunal has reproduced relevant portion of another tribunal order rendered in the case of ITO vs. M/s Universal Polypack (India) Pvt. Ltd. in ITA No. 609/JP/2017 dated 31.01.2018. In this case, the tribunal held that if the assessee has opted for DCF method, the AO cannot challenge the same but the AO is well within his rights to examine the methodology adopted by the assessee and/or underlying assumptions and if he is not satisfied, he can challenge the same and suggest necessary modifications/alterations provided the same are based on sound reasoning and rationale basis. In the same tribunal order, a judgment of Hon'ble Bombay High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ider these tribunal orders. Respectfully following this judgment of Hon'ble Bombay High Court, we set aside the order of CIT (A) and restore the matter to AO for a fresh decision in the light of this judgment of Hon'ble Bombay High Court. The AO should scrutinize the valuation report and he should determine a fresh valuation either by himself or by calling a final determination from an independent valuer and confront the same to the assessee. But the basis has to be DCF method and he cannot change the method of valuation which has been opted by the assessee. In our considered opinion and as per report of research committee of (ICAI) as reproduced above, most critical input of DCF model is the Cash Flow Projections. Hence, the assessee should be asked to establish that such projections by the assessee based on which, the valuation report is prepared by the Chartered accountant is estimated with reasonable certainty by showing that this is a reliable estimate achievable with reasonable certainty on the basis of facts available on the date of valuation and actual result of future cannot be a basis of saying that the estimates of the management are not reasonable and reliable. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which has been opted by the assessee. The Tribunal has followed the judgment of Hon ble Bombay High Court and disregarded various other Tribunal orders against the assessee which were available at that point of time. In the present case also, we prefer to follow the judgment of Hon ble Bombay High Court rendered in the case of Vodafone M-Pesa Ltd., Vs. Pr. CIT (supra) in preference to the judgment of the Hon ble Kerala High Court cited by DR of the Revenue rendered in the case of Sunrise Academy of Medical Specialities (India) (P.) Ltd. Vs. ITO (supra) because this is settled position of law by now that if two views are possible then the view favourable to the assessee should be adopted and with regard to various Tribunal orders cited by learned DR of the Revenue which are against the assessee we hold that because we are following a judgment of Hon ble Bombay High Court rendered in the case of Vodafone M-Pesa Ltd., Vs. Pr. CIT (supra), these tribunal orders are not relevant. In the case of Innoviti Payment Solutions Pvt. Ltd., Vs. ITO (supra), this judgment of Hon ble Bombay High Court was followed and the matter was restored back to the file of AO for a fresh decision with a direc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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