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TMI Blog2022 (12) TMI 1311X X X X Extracts X X X X X X X X Extracts X X X X ..... merely adopted the projections made by the management and there was substantial difference in cash flow projections in both the valuation reports itself. The valuation could not be substantiated by the assessee. We also concur that only excess premium exceeding face value of shares could be brought to tax u/s 56(2)(viib). Therefore, the adjudication as done by Ld. CIT(A) in the impugned order could not be faulted with. We order so. - ITA No.1558/Chny/2019 And ITA No.3445/Chny/2018 - - - Dated:- 6-12-2022 - Hon ble Shri Mahavir Singh, Vice President And Hon ble Shri Manoj Kumar Aggarwal, AM For the Assessee : Shri T.Shanmugam (Advocate)- Ld. AR For the Revenue : Shri P.Sajit Kumar (JCIT)-Ld. DR ORDER MANOJ KUMAR AGGA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the company issuing shares to choose the valuation methodology under the provisions of the IT Act read with the rules framed thereunder for the purposes of determining the 'fair market value' (FMV) of such shares at premium. It is submitted that the Ld. AO has erred in holding that the projections of the management are unrealistic by comparing it with the actuals. 1.3 The grounds taken by the Revenue are as under: - The order of the Ld. CIT(A) is contrary to law, facts and circumstances of the case. The Ld. CIT(A) erred in allowing relief to the assessee by determining the face value of equity shares at Rs.100/- per share without elaborating the methodology on which such value has been arrived at, after rejecting the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to bring to tax excess share premium received by the assessee. 2.2 The assessee relied on discounted cash flow (DCF) method to arrive at valuation of shares which was held to be not accurate since forecasting future performance was difficult. The Ld. AO also found inconsistencies in the valuation report furnished by the assessee since the valuation primarily relied upon the cash flow projections made by the management for the next five years. The valuations arrived at in the valuation report was at huge variance with the book value. Therefore, rejecting the valuation made by the assessee, Ld. AO adopted intrinsic value of Rs.74/- per share and added the differential of Rs.355.25 Lacs to the income of the assessee. 2.3 During appellat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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