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iii) In so far as reliance placed by the assessee at two valuation reports dated 16.8.2012 and 27.12.2012, he held that clause (a) of Explanation section 56(2)(viib) provides for two methods for computation of the fair market value of the shares issued by the company, one which is provided in the rules, i.e., 11U & 11UA and other one is residuary method which provides assistance to the assessee to substantiate the value to the satisfaction of the AO on the date of issue of shares. Here in this case no where assessee was able to substantiate the particulars of the shares of the company as on date of issue of shares and therefore assessee's case would not fall within the ambit of sub clause (ii) of clause (a) of the Explanation. The assessee has only discussed about value and valuation of the subsidiary of the assessee company and not the date of issuance of the shares. Thereafter, after quoting extensively the provision of section 11U and 11UA, he held that value of unquoted equity shares shall be the value based on the valuation which has been determined in the manner prescribed in clause (a) or clause (b) of rule 11UA, which provides for computation of value of shares based on book value in the balance sheet and clause (b) provides for the computation of fair market value of unquoted equity shares by the merchant banker or as per discounted cash flow method. He held in so far as DCF method is concerned the same has to be on the date of receipt of consideration and here in this case same was received in the financial year 2011-12 and here in this case DCF valuation has been conducted by the Chartered Accountant who was not even a follow member which is the condition prescribed under Rule 11U. In so far as report dated 27.12.2012 is concerned, he held that the same is not in accordance with rule 11UA, because, firstly, it is after the date of issuance of shares; and secondly, the market value of the shares had determined on Rs. 77.06 per share, whereas in the earlier report dated 27.12.2012 the fair market value of the shares was less than Rs. 30, this shows such a huge variation within the span of four months which is not only unreasonable but also unjustified. The valuation report dated 16.8.2012 was based on unaudited financials, whereas report dated 27.12.2012 is based on audited financials and both reports have been issued by the same Chartered Accountant firms. Further, in the valuation report dated 16.8.2012 NAV method has been adopted whereas in valuation report dated 27.12.2012, DCF method has been adopted. There is no NAV method prescribed under Rule 11UA which is applicable in the instant year and therefore, report dated 16.8.2012 is liable to be rejected. Even going by the valuation report of 27.12.2012 though DCF method has been mentioned however valuer has ultimately applied NAV method only.

27. Now whether such a satisfaction of the AO can be substantiated by the Ld. CIT(A) by stating that it should be determined as per sub- clause (i). As observed by us, AO has not doubted the substantiation of the value of the shares and the valuation method except on the points as highlighted above. In our opinion, when AO has accepted the valuation method which was also based on several precedence on the date of the issuance of the shares, then Ld. CIT(A) cannot acquire jurisdiction to tinker with such a valuation or valuation method. Here in this case, the Ld. CIT(A) has doubted the substantiation of the value of the shares on the ground that the valuation report submitted by the assessee of the independent valuer is not correct on various counts; and one of the prime reasons stated by him is that valuer has not adopted the method prescribed in 11UA. It would be very pertinent to note that shares were allotted on 8th September, 2012, when neither the provision of section 56 (2) (viib) was there in the statute nor the prescribed method of rule 11U and 11UA was notified, as same was brought in the Rules for the purpose of section 56(2)(viib), w.e.f. 29.11.2012, i.e., after more than two months from the date of the allotment of the shares. There was no prescribed method of Rule 11 U & UA for determination the market value on the date of allotment of shares. In such a situation, it would implausible to hold that the Valuation report of the independent Valuer is not correct, since method adopted by him is not in accordance with 11UA. Once the computation mechanism as per new prescribed method was not available at the time of issuance of shares, then it is unfathomable to apply such method so as to reject the assessee's valuation and assessee cannot be expected to comply with the method when it was notified subsequent to the date of allotment of the shares. Accordingly, we hold that it would not be fair to make any kind of enhancement or addition simply based on provision of section 11UA.

(v) He has rejected the contention with regards to consistency for the purposes of valuation of investments in Mail Today.

29. First of all, one has to see the justification of the fair market value as given in Explanation (a) which provides for determination in either of the following two manner; firstly, which may be determined in accordance with method prescribed, i.e., 11U & 11UA; or secondly, the company substantiates the fair market value to the satisfaction of the Assessing Officer based on the value of the date of issuance of shares. As already held above, assessee had substantiated the fair market value which was based on Valuation Report dated 27.12.2012, which in turn was largely based on the valuation of share provided by the Valuer of the Mail Today as on 20.7.2012, wherein the valuer has applied DCF method in order to value the share of Mail Today. As per valuation report dated 27.12.2012, the value per share of the assessee company on NAV method was worked out to Rs. 77.06, which was far more than on which assessee had issued shares, i.e., at Rs. 30. Ergo, the underlying asset of the assessee company, i.e., Mail Today was valued as per DCF method and value of shares of Assessee Company was based on NAV method. This substantiation prima facie has not been tinkered with by the AO except for the factors already sated in the foregoing paragraphs. When law envisages that the FMV can be determined in either of the two manners, whichever is higher, so as to demonstrate that the value of shares does not exceeds the FMV, then AO cannot insist upon to follow only one particular method. Here the assessee had substantiated the fair market value which was much higher and the shares have been issued at lower price. It would be incorrect to hold that substantiation made by the assessee has to be only in accordance with Rule 11U and 11UA. Ld. CIT (A) cannot impose Rule 11U/11UA to hold that assessee's substantiation is incorrect, simply because the value adopted for the shares as per 11UA is less. The report of the Valuer of the assessee company based on NAV method cannot be tested in terms of 11U/11UA on the ground that the Rules do not prescribe valuation as per 'Net Asset Value' method. The substantiation of the fair market value of the assessee has to be first tested on the basis of the valuation done by the assessee and it cannot be tested from the lens of 11UA, which can be applied in case sub-clause (i) has been exercised. When option of sub- clause (i) has not been exercised, then Ld. CIT (A) cannot resort to apply the same and reject the substantiation provided in sub-clause

32. Lastly, in so far as rejecting of Valuation report by the Ld. CIT (A) on the ground that the Chartered Accountant who has given the Valuation report in the case of the assessee was not a competent person in terms of 11U, we are of the opinion the same would only be relevant, when the Valuer has done the valuation in the manner prescribed in 11U and 11UA, because it is in Rule 11 such a condition has been prescribed. If assessee has not opted for 11U & 11UA, then all those guidelines and formulas given therein would not apply and Ld. CIT(A) cannot thrust upon the assessee the option should be exercised only under 11U and 11UA, which admittedly at the time of issuance of shares such method was not even prescribed in the statute. Prior to Rule 11UA, Net Asset Value method was accepted method in which no discrepancy has been pointed by the Ld. CIT (A). First of all, the valuation of the shares of Mail Today has been done under DCF method and the valuation of assessee share has been done on NAV method. The reason being, the valuation report for the valuation of the shares by the Mail Today as on 20.7.20012 was shown under DCF method, wherein Rs. 40 per share were determined. Such a valuation of the shares has been accepted by the revenue in the case of Mail Today under scrutiny proceedings, which cannot be discarded. Determination of value of shares on the basis of financial statement of a Company or the book value does not have much relevance under DCF method, because it is based upon, fair expected revenue growth and fair expected cash flow for a period of five years; discount rate and terminal growth rate; and terminal value, etc. are the factors which are taken in the consideration. Therefore, to reject the valuation of the Mail Today mainly on the basis of losses shown in the financial statement would not be correct, until and unless some discrepancy has been out either in the DCF method or in the Valuation Report furnished by an independent Valuer of Mail Today.