{"id":55828,"date":"2025-08-12T10:50:26","date_gmt":"2025-08-12T05:20:26","guid":{"rendered":"https:\/\/itatonline.org\/digest\/max-hospitals-and-allied-services-ltd-v-dcit-mumtribwww-itatonline-org\/"},"modified":"2025-08-12T10:50:26","modified_gmt":"2025-08-12T05:20:26","slug":"max-hospitals-and-allied-services-ltd-v-dcit-mumtribwww-itatonline-org","status":"publish","type":"post","link":"https:\/\/itatonline.org\/digest\/max-hospitals-and-allied-services-ltd-v-dcit-mumtribwww-itatonline-org\/","title":{"rendered":"Max Hospitals and Allied Services Ltd. v. DCIT, (Mum)(Trib)www.itatonline.org"},"content":{"rendered":"<p>The assessee issued shares at a premium of \u20b910 per share based on a Chartered Accountant\u2019s valuation using the DCF method as prescribed under Rule 11UA(2)(b). The AO rejected the valuation citing unrealistic projections and absence of tangible assets, and added the premium to income u\/s 56(2)(viib). The CIT(A) noted that in AY 2018\u201319, the same valuer\u2019s report was accepted by the department and deleted the addition. The Tribunal, following <strong>Cinestaan Entertainment (P.) Ltd. v. ITO [2019] 106 taxmann.com 300 (Delhi)(Trib)<\/strong> affirmed in PCIT v. <strong>Cinestaan Entertainment (P.) Ltd.[2021] 433 ITR <\/strong>\u00a0<strong>[2021] 433 ITR 82 (Delhi)(HC)<\/strong>, held that where a recognised method prescribed in law is adopted by a qualified valuer, the AO cannot substitute his own valuation or reject it merely because projections differ from actual results. Variations are inherent in DCF valuation, which is based on reasonable estimates. Deletion of addition upheld. (AYs 2016\u201317, 2017\u201318) (ITA Nos. 3083\u20133084\/Mum\/2025, dt. 11-8-2025 ) <strong><\/p>\n<p><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>S. 56 : Income from other sources \u2013 Share premium \u2013 Valuation under DCF method \u2013 AO cannot substitute or reject valuation done by a prescribed valuer without authority \u2013 Projection variations with actuals cannot be a ground to disregard valuation \u2013 Deletion of addition justified. [S. 56(2)(viib),  11UA(2)(b) ]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-55828","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-ews","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/55828","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=55828"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/55828\/revisions"}],"predecessor-version":[{"id":55829,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/55828\/revisions\/55829"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=55828"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=55828"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=55828"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}