DCIT Vs. Goldmine Commodities Pvt. Ltd.

Parties Involved

Facts Summary

Goldmine Commodities Pvt. Ltd. filed its return of income on 05.10.2016, declaring a total income of Rs. 3,26,60,820. The company issued 6,00,000 equity shares at a premium of Rs. 190 per share, receiving share capital of Rs. 60,00,000 and share premium of Rs. 11,40,00,000. The Assessing Officer (AO) called for valuation under Rule 11UA and found the projections for the Discounted Cash Flow (DCF) method to be inflated. The AO invoked section 56(2)(viib) and added Rs. 6,58,62,000 as 'income from other sources'. The assessee appealed to the Commissioner of Income-tax (Appeals) (CIT(A)), who deleted the addition. The Revenue appealed to the Income Tax Appellate Tribunal (ITAT).…

Legal Issues

• 1. Whether the Assessing Officer was justified in substituting the DCF method with the NAV method for determining the fair market value of shares.

Judgment Outcome

Decided in favour of Revenue.

Precedents Relied Upon

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