May 06, 2019
Tax tribunal rejects I-T department’s valuation tax math
Can a loss making company sell its stake at a valuation higher than the fair market value? Yes, if the valuation is computed through the discounted cash flow method, or DCF, as per a tax tribunal ruling. Many companies, including startups, were questioned by the income-tax department for high valuations that were based on future projections even as they were suffering losses in the present.