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Regal Buildtech P. Ltd. 2/48, Shopping Centre, Malcha Marg, New Delhi vs ACIT Circle-21(1) New Delhi
June, 19th 2019

Referred Sections:
Section 56(2)(viib) of the Act,
section 292B of the Income Tax Act, 1961.

Referred Cases / Judgments:
Sudhir Menon HUF Vs. ACIT(2014)
ACIT Vs. Sudhir Menon [2014] ( 45 taxmann.com 176) (Mumbai-Trib)
ACIT Vs. Subodh Menon [2015] [ITA No. 676/mum/2015](Mumbai-Trib.)
DCIT Vs. Dr. Rajan Pai [2016] (82 taxmann.com 347) (Banglore-Trib.)
Kumar Pappu Singh Vs. DCIT [2018](101 taxmann 122) (Vishakhapatanam Trib.)
Rameshwaram Strong Glass (P) Ltd. Vs. Income-tax Officer[2018] (96 taxmann.com542)
Assistant Commissioner of Income-tax, Mumbai Vs. Koch Chemical Technology Group(India) Ltd. (2015) (64 taxmann.com 464)
Smt. Suman Goel vs. Income Tax Officer [2013] (1SOT 127)
Sunrise Academy of Medical Specialties (India) (P) Ltd. Vs. ITO 94 taxmann.com 181 order dated 22/5/2018. Kerala High Court
Pr. CIT(A) Vs. NDR Promoters Pvt. Ltd. ITA No. 49/2018 dated 17/1/2019. (Del. HC)
Sonia Gandhi Vs. ACIT , W.P (C) 8482/2018, dated 10/9/2018. (Del. HC)
J. B Boda & Co. (P) Ltd. Vs. CBDT 223 ITR 271 dated 30/10/1996 (SC)

 

                                            1                      ITA No. 7505/Del/2018


                      IN THE INCOME TAX APPELLATE TRIBUNAL
                          DELHI BENCH: `F' NEW DELHI

                BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER
                                        AND
                   MS SUCHITRA KAMBLE, JUDICIAL MEMBER

                      ITA No. 7505/DEL/2018 ( A.Y 2014-15)

          Regal Buildtech P. Ltd.       Vs          ACIT
          2/48, Shopping Centre, Malcha             Circle-21(1)
          Marg,                                     New Delhi
          New Delhi
          AACCR9566P
          (APPELLANT)                               (RESPONDENT)



                      Appellant by      Sh. Ajay Wadhwa, Adv, Ms.
                                        Aushi Gupta, CA
                      Respondent by     Smt.     Sulekha   Verma,
                                        CIT(DR)

                       Date of Hearing               31.05.2019
                       Date of Pronouncement         18.06.2019

                                         ORDER

PER SUCHITRA KAMBLE, JM

          This appeal is filed by the assessee against the order dated 9/10/2018
passed by CIT(A)-7, for Assessment Year 2014-15.

2.        The grounds of appeal are as under:-

     1.        "The   order of the Commissioner of Income Tax (Appeals) - 7, Delhi
     (referred to as "CIT(A)") is bad in law and on facts.
     2.   That the A.O. / CIT(A) has erred in law and on facts in substituting
     himself as an expert on valuation of shares in contradiction to the valuation
     expert and questioning the valuation report issued by the prescribed valuer "
     Chartered Accountant" as per Rule 11UA(2)(b) of the Income Tax Rules, 1962
                                      2                       ITA No. 7505/Del/2018


without understanding the valuation method prescribed viz Discounted Cash
Flow(DCF) method.
3.   The CIT(A) has erred in law and on facts in failing to appreciate the fact
that the queries raised by the assessing officer in respect of the valuation
report were duly directed to the Chartered Accountant who in turn responded
with complete clarifications. The appellant also furnished the report of another
independent Chartered Accountant who valued the shares based on the
observation of the AO by factoring interest costs on loans. Without taking
cognizance of the second valuation report the AO/CIT(A) dismissed the
valuation of an expert based on presumption, suppositions, generalities and
assumptions.
4.   That the AO/ CIT(A) has erred in law and on facts in stating that the
projections in the valuation report are contrary to the existing state of affairs
of the company.
5.   The CIT(A) has erred in law in rejecting the valuation using DCF method of
an expert and thereafter substituting his own valuation by adopting the net
asset value of the shares whereas option of selecting method between NAV or
DCF was with the appellant in accordance with rule 11UA(2) of Income Tax
Rule, 1962. This is grossly illegal and the CIT(A) has exceeded his
jurisdiction.
6. The CIT(A) has erred in law and on facts in failing to appreciate that the
intent and purport of this section was to check the malaise of accommodation
entries. In the case of the appellant the directors own funds have been
received through holding company and right shares issued to the holding
company and therefore there can be no allegation of any malaises or
accommodation entry operation. The Ld. CIT (A) failed to appreciate that it did
not matter whether the shares were issued to the holding company at par or
at premium since the entire money received by the appellant was from its
holding company, which had in turn received the money from the directors.
                                       3                        ITA No. 7505/Del/2018


7.    The CIT(A) has erred in law and on facts in holding that the issue of
shares does not constitute a right issue as the shares were not offered on a
proportionate basis to the existing shareholders. Therefore, according to the
CIT(A) the ratio of the Bombay Tribunal in the case of Sudhir Menon HUF Vs.
ACIT(2014) 45 taxmann.com 176 is not applicable.
8. The AO/CIT(A) has also erred in applying the explanation to the section

56(2)(viib) of the Act, which is as under-


"(a) the fair market value of the shares shall be the value--
(i)   as may be determined in accordance with such method as may be
prescribed;
or
(ii) as may be substantiated by the company to the satisfaction of the
Assessing Officer, based on the value, on the date of issue of shares, of its
assets, including intangible assets being goodwill, know-how, patents,
copyrights, trademarks, licences, franchises or any other business or
commercial rights of similar nature, whichever is higher;"

The value of the shares is clearly justifiable based on the value of the
property held by the assessee company in the form of a Mall. The value of
Mall itself justifies the value of shares on the date of issue and the case of the
appellant clearly falls under sub clause (ii) of the explanation (a) reproduced
above.
9.    The CIT (A) has erred in law and on facts in failing to appreciate that the
addition of Rs. 20,30,00,000/- was made under section 56(2)(vii)(b) which is
applicable only to individuals and HUF and therefore, the order of the
assessing officer is without jurisdiction. The CIT(A) has erred in holding that
the addition made under the said section constitutes only a typographical
mistake, which is curable under section 292B of the Income Tax Act, 1961.
10. The Appellant Company craves leave to add/alter/amend the grounds of
                                       4                     ITA No. 7505/Del/2018


     Appeal at the time of hearing."

3.      The assessee e-filed its return of income on 30.09.2014 for Assessment
Year 2014-15 declaring loss of Rs. 4,09,87,384/-. The case was selected for
scrutiny. During the year under consideration, the assessee declared receipt
of share premium amounting to Rs.40.60 crores. The assessee had issued 14
lakh shares of face value of Rs.10 per share to its existing share holders,
namely M/s Prime Land Real Estate (P) Ltd. & M/s Eureka Ventures
Foundation, during the year at a premium of Rs.290/- per share. During the
course of assessment proceedings, the assessee was asked to justify the share
premium charged on issue of shares issued during the year and to furnish a
valuation certificate in support thereof. The assessee furnished replies vide
letter dated 08.07.2016 and 30.11.2016 and enclosed copy of share valuation
certificate dated 17.06.2013 issued by M/s Uberoi Sood Kapoor, CAs. The
valuation was carried out based on Discounted Cash Flow method. The value
stated in the aforesaid certificate that the share valuation of the assessee
company was based on the cash flows of the mall. The Assessing Officer
observed that cash inflows are projected rental income while cash outflow are
calculated only on account of property tax, miscellaneous expenses and LLP
loss.    From the value of the enterprise thus worked out, loans have been
deducted to arrive at the equity value of the company. However, a perusal of
the account of the assessee and computation of income for the year under
consideration reveals that the assessee has been consistently reported heavy
losses. A significant cost in respect of the property was the interest expenses
on capital borrowed for construction which, for the year under consideration
was Rs.3.83 crores, if such interest is considered, the net cash flows from
property becomes negative. The cash flows projected by the assessee company
are also found to be completely at variance with the projection used for DCF
method. The Assessing Officer further observed that the valuation done by the
accountants suffers from the defect that it does not take into account the
significant financial outflow on account of interest on capital borrowed for
                                        5                      ITA No. 7505/Del/2018







construction of the property. If such cost were considered there would be net
cash out flow and valuation would realistically reflect the perpetual losses
being reported by the assessee. The assessee was asked to explain why such
interest expenses were not taken into account for calculation of equity value.
The assessee furnished an explanation dated 23.12.2016 from M/s Uberoi
Sood Kapoor, CAs, to the effect that had such interest been taken into account
the equity value would be even higher. The necessary figures in the calculation
were also perused. However, such projections are also not borne out by any
verifiable data and the calculation appears to be an afterthought designed to
offset the query made, the projected cash flows have also been adopted
without any rational or clear basis and contrary to the existing state of affairs
of the company. The valuation has been inflated intentionally to raise security
premium and to defeat the intention behind enactment of Section 56(2)(viib) of
the Act. In view of the above discussion, the Assessing Officer held that the
share premium amount of Rs.20,30,00,000/- received from M/s Primeland
Real Estate P. Ltd. shall be brought to tax as income u/s 56(2)(viib) of the Act.
Thus, order u/s 143(3) was passed on 31/12/2016 by the Assessing Officer,
assessing    the    income    at    Rs.16,20,12,620/-      after   addition      of
Rs.20,30,00,000/- u/s 56(2)(viib) of the Act.

4.    Being aggrieved by the assessment order, the assessee filed appeal before
the CIT(A). The CIT(A) dismissed the appeal of the assessee.

5.    The Ld. AR submitted that the basis of taking the projected figures were
clarified to the Assessing Officer during the course of assessment proceedings
through a letter of valuer dated 16.12.2016. The Assessing     Officer   did    not
consider such letter. The clarification letter was again furnished before the CIT
(A) vide submissions dated 07.07.2017. Valuer accountant had not merely
prepared the report based on the projected figures provided by the client, but
also mentioned that he had carried out the analysis of the information. For that
he had relied on the published and the secondary data. Published and
                                        6                        ITA No. 7505/Del/2018


secondary data was referred in the clarification letter dated 16/12/2016. The
scope of work and the limitations mentioned in the report given by the valuer is
the reporting requirements and for the compliance with the professional
standards of the valuer. In the reporting requirements of the "Technical guide
issued by the ICAI on Share Valuation published in 2009" specifically provides
such limiting conditions. As per Clause (3) Part I of Second Schedule to
Chartered Accountants Act, 1949 "A CA in practice is deemed to be guilty of
professional misconduct if he permits his name or the name of his firm to be
used in connection with an estimate of earnings contingent upon future
transactions in a manner which may lead to the belief that he vouches for the
accuracy of the forecast." Further as per SRE-3400, "The Examination of
Prospective Financial Information" issued by the Institute of Chartered
Accountants of India - provides that the management is responsible for the
preparation and presentation of the prospective financial information, including
the identification and disclosure of the sources of information, the basis of
forecasts and the underlying assumptions. The auditor may be asked to
examine and report on the prospective financial information to enhance its
credibility, whether it is intended for use by third parties or for internal
purpose. Thus, while making report on projection, the auditor need to mention
that his responsibility is to examine the evidence supporting the assumptions
and   other   information   in   the   prospective   financial   information,      his
responsibility does not include verification of the accuracy of the projections,
therefore, he does not vouch for the accuracy of the same'. The Ld. AR
submitted that these scope and limitations are not the qualification/opinion.
The valuation report of the valuer is not the Financials which require any
qualification. These are statutory compliances. The Ld. AR submitted that the
Revenue alleged that valuation report suffers from defects as not considered the
interest cost. There are two approaches in DCF method to calculate the free
cash flows (a) Free Cash flows to the Firm - Cash flows after meeting all the
operating cash expenses but prior to debt payments; (b) Free Cash Flows to
Equity - Cash flows after meeting all the operating expenses, interest and
                                       7                      ITA No. 7505/Del/2018


principal payment of debt. When the cash flows are calculated for the
firm/enterprise, the entire value of the debt has to be reduced from the value of
the enterprise to arrive at the value of equity shareholders When the cash flows
are calculated for the firm/enterprise, the entire value of the debt has to be
reduced from the value of the enterprise to arrive at the value of equity
shareholders. In the valuation report dated 17.06.2013, the valuer had
determined the value of shares by taking into consideration free cash flows to
the firm and then reduced the value of debt to arrive at the value of equity.
Further     it is very logical that if the entire loans have been reduced at Zero
period, how the interest would arise in future. The Ld. AR submitted that the
Revenue alleged that projected figures are not verifiable. During the course of
assessment proceedings the assessee had provided the clarifications dated
16.12.2016 regarding from where the projected figures were taken. Projected
cash flows were based on the various reports/data gathered by the analyst and
management and analysed and verified by the valuer as clarified in the
statement referred above.     The Assessing Officer did not consider such
clarification statement while completing the assessment.

6.    The Ld. AR further submitted that free cash flows to the firm were
calculated by the valuer for the calculation of NPV. Free cash flows to the firm
are calculated after deducting the operating expenses but before the interest
and repayment of debt. NPV was calculated using the free cash flows to the
enterprise, the interest expenses was not reduced. In DCF method of
determining the value of shares, projections are based on the credible data. The
valuer had reduced the entire amount of loan from the enterprise value to
arrive at the value of equity shareholders as per the requirement of the method
as prescribed in the International Standards and guidelines issued by the ICAI.
Neither the valuer nor the management had stated anywhere that the loans
have been paid off, but the method was to arrive at the value of equity by
reducing the loans. It was an assumption that the cash flows will generate
infinitely. Estimation of stable growth rate till perpetuity is of great
                                        8                       ITA No. 7505/Del/2018


significance. Ideally perpetuity growth rate should not be more than the
expected economic growth rate. Growth rate has been assumed by the valuer
after analysing the industry growth rate, (growth rate was determined after
analysing the reports published by the Indian Brand Equity Foundation).
Various factors and published data have been considered for determining the
growth rate for calculating the terminal value. Valuer had after considering the
various reports and the industry growth rate conservatively taken 5%. The
projection of the occupancy and rentals were based on the data provided by the
client, which was based on the similar Mall located within 2km. of the Pulse
Mall. Further, when the occupancy of mall will increase that will also increase
the footfall, which ultimately increase the turnover of the tenants. Since, the
rent was also based on the turnover of the tenants, it would automatically
increase. Occupancy and the rental are the two different factors and cannot be
interchanged with each other. Hence the CIT (A) has erred in stating that the
valuer had considered the two dimensional growth rate. Discount rate actually
represents the time value of money for a certain cash flow. It is the
representation of the interest rate that could get on a similar investment
elsewhere. Capital asset pricing model (CAPM) was used to arrive at the
discount rate of 15%. The growth rate has been added to the capitalization rate
to arrive at the discount rate for the future cash flows. "Higher     the interest
rate lesser will be the NPV and vice-versa" - It is the basic principal of time
value of money. In the opinion of management and valuer the resulted rate of
15% is the correct representative of the company's discounting factor. Rate has
been simply derived by applying the formulas. Further the cash flows generated
would not received by the appellant only at the last day of the year. It would
have been received over the period. For determination of correct NPV, valuers
has taken the scientific and approved method i.e., average of the days in a year
and arrive at the dates at which the rate was applied. The CIT(A) has taken the
last day of the year for applying the discount rate to calculate the NPV. Loan
reduced at the Zero period is only for the purpose of calculating the equity
value as already discussed above and it did not mean that the loans have
                                          9                      ITA No. 7505/Del/2018


actually been paid off. This valuation report has been prepared by using Free
Cash Flows to Equity, in which periodical interest and loan repayments have
been considered and was obtained during the assessment proceedings to
satisfy the Assessing Officer. Repayment of loans has been taken as per the
repayment schedule provided by the management.           The     loan     repayment
chart of the management consists of the repayment of (a) Bank loan; (b)
Redemption of debenture; and (c) inter corporate loans. Repayment of bank
loan was taken as per the bank repayment schedule. Repayment of debentures
were taken as per the redemption terms. And Repayment of incorporate loans
were taken at the 5th year. Reason for the spiked up figure of repayment in
second year was the redemption of the debentures as per the terms of
redemption.    Loans were reduced on the date of valuation by the valuer to
calculate the NPV. The valuer had applied the method to arrive at the NPV as
required by the Assessing Officer. Sources were not required to explain to apply
the method. Same as given in point No. 3 of assessee's contention before the
CIT(A). The CIT(A) has erred in stating that no clarification letter was
produced/     furnished   before   him/   Assessing   Officer.   The    letter   dated
16.12.2016 was furnished before the Assessing Officer and again before the
CIT(A) vide submissions dated 07.07.2017.During the course of assessment or
appellate proceedings the Assessing Officer and the CIT(A) did not asked any
further clarification or document and the assessee was of the view that they
were satisfied with the clarification given. The allegation of the CIT(A) that the
assessee did not furnish such clarification or the documents referred therein is
not factually correct. (A) Extract of the certificate - regarding projected cash
flow statement; There was such extract in the valuation report dated
22.12.2016. There are only 2 annexures of the valuation report dated
22.12.2016, Annexure- A and Annexure - B. All the date considered for the
valuation was verified by the valuer.

7.    The Ld. AR further submitted that for the projection of the lease rentals
the valuer had analysed various published and secondary data available at that
                                        10                      ITA No. 7505/Del/2018


time and also data provided by the client. During the course of proceedings the
assessee had referred the data analysed and verified by the valuer vide letter
dated 16.12.2016 but neither the Assessing Officer nor the CIT(A) had given
due consideration to the clarifications of the assessee and had never asked for
any data to furnish before them. The assessee had furnished the clarification
regarding the market research report of analyst vide its letter dated
16.12.2016. Neither the Assessing Officer nor the CIT(A) had given due
consideration to the clarifications of the assessee during the course of
assessment as well as appellate proceedings. If the AO or the CIT(A) had ever
asked to furnished the data, the assessee definitely would provide the
clarification in this regard. No further query by the CIT(A) led to the
assumption that he understood the basis and did not need any further detail.
Further, various other factors and data have also been considered by the
valuer for determining the value of share, but it is not possible for the valuer to
mention or to describe each and every report or data he analysed. Valuation is
not mechanical process, which everyone can use. It requires so much of
professional judgment. Even the valuation of different valuers can differ
because of the estimations and the professional judgment involved. In Para
9.1.1 of the order referred by the CIT(A) that "if the valuation is not based on
relevant material, the adjudicating authority can interfere with the same." while
referring the Supreme Court judgment. In the present case, the material used
for the purpose of calculation were never examined by the CIT(A). Then how the
CIT (A) could reach at the conclusion that the valuation suffers from defects.
Adjudicating authority can interfere with the valuations when it was not based
on the relevant material. The Ld. AR submitted that here the adjudicating
authorities never examine the material used. In the judgment of Supreme
Court referred in Para 9.1, conclusion was based on the material - whether the
material was relevant or not. Thus, the Ld. AR submitted that the Assessing
Officer has not only a right but he is also duty bound to examine the valuation
report evaluate it and record his findings on the same. Such finding should be
based on relevant material and rational view taken in a judicious manner. The
                                         11                    ITA No. 7505/Del/2018


CIT(A) never examined the material.


8.    The Ld. AR submitted that Section 56(2( (viib) does not apply in the
cases where right shares were issued by the assessee. The assessee had offered
the right shares to the existing shareholders of the company proportionate to
the existing shareholding of the shareholders. M/s Primeland Real Estate Pvt.
Ltd.(Holding Company) had subscribed the right issue to the extent of the
7,00,000/- shares and permitted the appellant company to offer its remaining
shares to the other existing shareholders of the company, if the board desired
to offer them to another shareholders. The board of the assessee company had
decided to allot the remaining shares to M/s Eureka Ventures as it had
subscribed for the higher no. of shares. The provisions of section 56(2)(vii) are
not attracted in cases where right shares were issued to the existing
shareholders on proportionate basis. The Ld. AR relied upon the following
judgments wherein it was held that in case of right issue provisions of section
56(2)(vii) would attract.


      (i)       ACIT Vs. Sudhir Menon [2014] ( 45 taxmann.com 176) (Mumbai-
      Trib)
      (ii)      ACIT Vs. Subodh Menon [2015] [ITA No. 676/mum/2015](Mumbai
      -Trib.)
      (iii)     DCIT Vs. Dr. Rajan Pai [2016] (82 taxmann.com 347) (Banglore-
      Trib.)
      (iv)      Kumar Pappu Singh Vs. DCIT [2018](101 taxmann 122)
      (Vishakhapatanam Trib.)


The Ld. AR further submitted that valuation report of expert can only be
disputed on the basis of the valuation report of another expert. As per the
explanation to the section 56(2)(viib) of the Act, the fair market value shall be
the value
                                       12                     ITA No. 7505/Del/2018


            (i)     As may be determined in accordance with such method
                   as may be prescribed; or
            (ii)   as may be substantiated by the company to the satisfaction
            of the Assessing Officer, based on the value, on the date of issue
            of shares, of its assets, including intangible assets being
            goodwill, know-how, patents, copyrights, trademarks, licences,
            franchises or any other business or commercial rights of similar
            nature, Whichever is higher;
   The Ld. AR further submitted that the prescribed method under clause (i) is
   Rule 11UA(2) of the Income Tax Rules. Sub rule (2) of rule 11UA specifically
   provides the method for determining the fair market value of shares. The
   assessee had adopted the option (b) of the rule 11UA(2) of the Income Tax
   Rules, which provides as under:
      "(b) the fair market value of the unquoted equity shares determined by a
      merchant banker or an accountant as per the Discounted Free Cash
      Flow Method."


The assessee company had engaged an accountant (Chartered Accountant)
who determined the value of equity share as per the DCF method prescribed
under the rule for the purpose of making the right issue. During the course of
proceedings before the lower authorities, both the Assessing Officer as well as
CIT(A) had found faults in the valuation report   made by an expert and made
his own valuation. The Assessing Officer and the CIT(A) has failed to appreciate
that as required by the law the valuation made by the expert can only be
disputed based on the valuation report made by another expert and therefore,
the valuation made by the CIT(A) presuming himself being an expert in the field
of valuation was not in accordance with the law. The Assessing Officer as well
as the CIT(A) both certainly could not understand the valuation method
prescribed under the rule 11UA(2)(b) i.e. DCF method and found out various
discrepancies in the valuation report submitted by the assessee which was
                                        13                    ITA No. 7505/Del/2018







made by an expert , Chartered Accountant. In fact, the CIT(A) considered
himself an expert and made his own valuation which was not as per the
valuation method prescribed under the Act. The Ld. AR relied upon the
following decisions:


             Rameshwaram Strong      Glass (P) Ltd. Vs. Income-tax Officer
      [2018] (96 taxmann.com542)
             Assistant   Commissioner    of   Income-tax,   Mumbai    Vs.   Koch
      Chemical Technology Group(India) Ltd. (2015) (64 taxmann.com 464)
             Smt. Suman Goelvs. Income Tax Officer [2013] (1SOT 127)
             M/s Ozoneland Agro Pvt. Ltd. [ITA No. 4854/Mum/2016}


9.    The Ld. DR relied upon the Assessment Order and the order of the CIT(A).
The Ld. DR also relied upon the following decisions:-

             Sunrise Academy of Medical Specialties (India) (P) Ltd. Vs. ITO 94
      taxmann.com 181 order dated 22/5/2018. Kerala High Court

             Pr. CIT(A) Vs. NDR Promoters Pvt. Ltd. ITA No. 49/2018 dated
      17/1/2019. (Del. HC)

             Sonia Gandhi Vs. ACIT , W.P (C) 8482/2018, dated 10/9/2018.
      (Del. HC)

             J. B Boda & Co. (P) Ltd. Vs. CBDT 223 ITR 271 dated 30/10/1996
      (SC)

10.   We have heard both the parties and perused the material available on
record. It is pertinent to note that the Assessing Officer as well as the CIT(A)
observed that projected figures are not verifiable. But during the course of
assessment proceedings, the assessee had provided the clarifications dated
16.12.2016 as to from where the projected figures were taken. As per the
                                        14                    ITA No. 7505/Del/2018


contentions of the Ld. AR, the projected cash flows were based on the various
reports/data gathered by the analyst and management and after analyzing and
verifying the same by the valuer. But the same was not considered either by
the Assessing Officer as well as by the CIT(A). From the records it can be seen
that the Assessing Officer as well as the CIT(A) never asked for furnishing the
data from the Assessee at any point of time. Thus, they have not given any
opportunity to the assessee to further clarify the projected cash flows. It is
agreed that valuation is not mechanical process but, determined from market
trends and other factors and after considering them, the valuer can determine
the value of share. Even if the said is doubted, the Assessing Officer should
have given proper opportunity to the assessee for allowing the assessee to
clarify the aspects of the valuation of the projected cash flow, which the
Assessing Officer failed to do so as well as the CIT(A) also did not take into
account the submissions made by the Assessee. Thus, it will be appropriate to
remand back all the issues contested herein to the file of the Assessing Officer
with a direction to decide the same afresh after verifying all the relevant
aspects of the valuation method regarding projected cash flow and arrive at a
reasoned conclusion. Needless to say, the assessee be given proper opportunity
of hearing by following principles of natural justice. Thus, appeal of the
assessee is partly allowed for statistical purpose.

11.   In result, the appeal of the assessee is partly allowed for statistical
purpose.
      Order pronounced in the Open Court on 18th        June, 2019.

        Sd/-                                                      Sd/-
   (R. K. PANDA)                                        (SUCHITRA KAMBLE)
ACCOUNTANT MEMBER                                        JUDICIAL MEMBER


Dated:         18/06/2019
R. Naheed

Copy forwarded to:
                                15                           ITA No. 7505/Del/2018


1.               Appellant
2.               Respondent
3.               CIT
4.               CIT(Appeals)
5.               DR: ITAT




                                              ASSISTANT REGISTRAR
                                                 ITAT NEW DELHI




     Date of dictation                                    31.05.2019

     Date on which the typed draft is placed before the 03.06.2019
     dictating Member

     Date on which the typed draft is placed before the
     Other Member

     Date on which the approved draft comes to the Sr.
     PS/PS

     Date on which the fair order is placed before the
     Dictating Member for pronouncement

     Date on which the fair order comes back to the Sr. 18.06.2019
     PS/PS

     Date on which the final order is uploaded on the 18.06.2019
     website of ITAT

     Date on which the file goes to the Bench Clerk       18.06.2019

     Date on which the file goes to the Head Clerk

     The date on which the file goes to the Assistant
     Registrar for signature on the order

     Date of dispatch of the Order

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