The assessee’s argument, with regard to the sale of shares in AITPL, that the TPO was bound by the CCI guidelines on valuation of shares is also not acceptable because the CCI guidelines were issued for a totally different purpose and cannot be transported into a pricing methodology prescribed for fixing ALP. Instead, the Discounted Cash Flow method for valuation is an accepted international methodology for valuing enterprises and for determining the value of the holding of an investor. Investors are interested in ascertaining the present value of their investments, considering the future earning potential of the underlying asset. Ascertaining the net present value of future earnings is more appropriate where market value of an investment is not readily ascertainable by conventional methods

U/s 275(1)(a), the AO cannot pass an order imposing penalty u/s 271(1)(c) if the relevant assessment is subject matter of appeal before the CIT(A). The same analogy will apply where the CIT(A) initiates penalty and the first appeal is pending before the Tribunal. Accordingly, the assessee’s request that the penalty proceedings should be stayed till the disposal of appeal by the Tribunal is not unreasonable. If the CIT(A) is allowed to proceed with the penalty proceedings, prejudice will be caused to the assessee as it will have to face multiplicity of proceedings. In case the assessee succeeds in the quantum appeal, the penalty order passed by the CIT(A) will have no legs to stand while if the assessee fails in the quantum appeal, the CIT(A) will get ample time of six months to dispose of the penalty proceedings. Therefore, to prevent multiplicity of proceedings and harassment to the assessee, the CIT(A) is directed to keep the penalty proceedings in abeyance till the disposal of quantum appeal by the Tribunal (CIT vs. Wander (Bom) referred)

In GKN Driveshafts 259 ITR 19 (SC) it was held that the AO is bound to furnish the reasons recorded for reopening the assessment within a reasonable time so that the assessee can file its objections thereto. Even as per the rules of natural justice, the assessee is entitled to know the basis on which the AO has formed an opinion that income has escaped assessment. There is no justifiable reason for the AO to deprive the assessee of the recorded reasons. If the reasons are not furnished to the assessee during the assessment proceedings, then the subsequent furnishing of the reasons after completion of assessment proceedings serves no purpose and amounts to the assessee being denied its right to raise objections to the validity of the reopening proceedings. A reassessment order passed without furnishing the recorded reasons is not sustainable in law. The furnishing of reasons after completion of assessment does not make good the defect/invalidity with which the initiation of proceedings u/s 147/148 is tainted (K V Venkataswamy Reddy (Bang) (attached), Tata International Ltd (ITAT Bom) & Videsh Sanchar Nigam Ltd 340 ITR 66 (Bom) (SLP dismissed) followed)