In the matter of complex subject of valuation of shares the Bombay High Court in 164DTR 257 has held that the AO can scrutinize the valuation report submitted by the assessee and he can determine a fresh val uation either by himself or by calling a determination from an independent valuer to confront the assessee but the basis has to be one adopted by the assessee be it dis counted cash flow method or NAV and he cannot change the method of valuation which has been opted by the assessee.
Mind it there is a contrary view of
Kerala High Court in Sunrise 409 ITR 109 which held that any premium received by a company on sale of shares, in excess of its face value, if the company is not one in which the public has substantial interest, would be treated as income from other sources. The high court in 12 ITR-OL 161 further held that the issue as to whether the funds received by the assessee in the form of share premium have been correctly offered for tax, is an issue to be comprehensively examined with reference to section 56(2)(viib) of the Act and if it is found that the share premium have not been correctly offered for tax as provided therein, the assessee has to be assessed.
The tribunal benches have taken varied views on the subject.
Bangalore bench last has taken a favourable view following Bombay high court decision .
Pushing assessee to different method would be like travesty of justice given that the option is entirely given to the assessee to select the method and the person category to undertake the valuation.