ITAT deletes additional share premium

The Mumbai ITAT deleted an addition of ₹36.54 crore made under Section 56(2)(viib) of the Income-tax Act on account of share premium. 

The appeal challenged the confirmation of an addition made under Section 56(2)(viib) in respect of share premium received from an unrelated strategic investor.

The Tribunal held that once the assessee had adopted the Discounted Cash Flow (DCF) method prescribed under Rule 11UA and supported it with a valuation report from a qualified professional, the Assessing Officer could not disregard the valuation merely because actual financial performance differed from projections.