Share Valuation Using DCF Method Valid Under Rule 11UA; AO Cannot Dispute Without Expert Opinion

In this ITAT ruling, the Tribunal held that the DCF method for share valuation was validly applied per Rule 11UA(2)(b), accepting the Chartered Accountant's certification of fair market value at Rs. 106 per share. The AO's attempts to find discrepancies in the CA's report were deemed improper as they lacked basis in acceptable principles or approved standards. The Tribunal determined that valuation can only be disputed by another legally recognized expert, thus the s.56(2)(viib) addition was erroneous. Regarding the s.68 addition, the Tribunal ruled that the proviso only permits scrutiny of immediate subscribing companies, not secondary funding sources. The s.14A disallowance was upheld as the assessee failed to rebut findings about expenditure incurred for earning dividend income. .....

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