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TMI Blog2022 (12) TMI 753X X X X Extracts X X X X X X X X Extracts X X X X ..... he DCF method - HELD THAT:- The determination of the valuation under DCF method was carried by the valuers on the basis of information or material available on the date of valuation and the projections of the revenue provided by the management. The methodology adopted by the assessee applying the DCF method is a recognized and accepted method. In our opinion the valuation under DCF method is intrinsically based on the projections and based on the potential value of the future business. These assumptions can undergo changes for a period of time. The Ld. DR also has not demonstrated that the methodology adopted by the assessee is not correct but simply the Ld. AO rejected the valuation as it does not match with the actual results. Various ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the assessee is a domestic company, engaged in rendering financial services filed its return of income admitting a total income of Rs. 2,03,15,000/- on 25/10/2017 for the AY 2017-18. Subsequently, the case was selected for scrutiny under CASS to examine (1) expenses incurred for earning exempt income and (2) share capital / capital. Subsequently, notice u/s. 143(2) was issued on 13/08/2018 and notice U/s. 142(1) was issued electronically on 31/8/2019 calling for information from the assessee. Further, the Ld. AO also issued letters on 25/11/2019, 3/12/2019 and 14/12/2019 which were served on the assessee electronically. In response, the assessee filed written submissions before the Ld. AO. The Ld. AO consequent to examination of the inf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ggrieved by the order of the Ld. AO, the assessee filed an appeal before the Ld. CIT(A)-1, Visakhapatnam. Before the Ld. CIT(A), the assessee filed same information and submitted that reliance is place on the following case laws viz., (i) Karmic Labs Private Limited vs. ITO in ITA No.3905/Mum/2018, dated 28/07/2020 and (ii)Vodafone M Pesa Limited Vs. DCIT [2020] 114 taxman.com (Mum. Trib.). The Ld. CIT(A) considering the submissions made by the Ld. AR and relying on the decision in the case of Karmic Labs Private Limited (supra) allowed the appeal of the assessee. Aggrieved by the order of the Ld. CIT(A), the Revenue is in appeal before the Tribunal. 3. The Revenue has raised the following grounds of appeal: 1. The Ld. CIT(A) is err ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Accountants, Chennai (Valuers) cannot be relied upon and hence the addition made by the Ld. AO be sustained. The Ld. DR also further submitted that there is a difference between the actual results and the projected results used for the purpose of valuation. The Ld. DR also further pointed out that the decision of the Ld. CIT(A) relying on the case viz., Karmic Labs Private Limited vs. ITO in ITA No.3905/Mum/2018, dated 28/07/2020 (supra) is distinguishable on facts that the decision in that case is with respect to section 56(2)(viia) of the Act and not section 56(2)(viib) of the Act and hence cannot be applied to the instant case. The Ld. DR therefore pleaded that the order of the Ld. AO be upheld. Per contra, the Ld. Authorized Repres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the value determined as per the DCF method. It is a settled principle that the Assessing Officer has no power to change the valuation method adopted by the assessee. In the instant case, the Assessing Officer has rejected the valuation under DCF method solely on the ground that the actual performance did not match the projections. The determination of the valuation under DCF method was carried by the valuers on the basis of information or material available on the date of valuation and the projections of the revenue provided by the management. The methodology adopted by the assessee applying the DCF method is a recognized and accepted method. In our opinion the valuation under DCF method is intrinsically based on the projections and based ..... X X X X Extracts X X X X X X X X Extracts X X X X
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