will be observed that the ratio of the
book value of the assets of demerged
undertakings to the total book value of the
company ... ZENITH SILK MILLS PVT. LTD.
Computation of Entitlement Ratio on Net asset Method
PARTICULARS Resultant Demerged Total
Company Company
(Rs.) (Rs.)
(a) Net Assets
capitalization of
assets when the amounting is on Net Asset basis as distinguished from
accounting based Gross Asset basis.
2. According to the Appellant ... vested in NTPC and accounting on Net Asset
Basis continued;
(b) that in Net Asset Basis accounting, the assets are depreciated
first to be adjusted
valuation was undertaken, and
the method adopted was the Discounting Cash Flow (DCF) method and
not the Net Asset Value (NAV) method. Reasons have also
strength of the Transactional Net Margin
Method is that net profit indicator (e.g return on
assets, operating income to sales, and possibly other
measures ... than in the case with price,
as used in comparable uncontrolled price method.
Net Profit Indicators also may be more tolerant to
some functional differences
net
worth of an undertaking in the cases where part of the assets falling within the
block of assets were transferred, no such method ... April, 1988 as if the asset was the
only asset in the relevant block of assets,".
30. Clause (a) of Explanation 2 to Section
Topsgrup Electronics Systems Ltd, ... vs Assessee on 19 February, 2016
IN THE INCOME TAX APPELLATE
better to appreciate the relevance TNMM method over the CUP
method.
1.8.1 Meaning
• Examines the net profit margin relative to an appropriate base that ... data required for application
of the comparable uncontrolled price method / cost plus method / resale price
method
• Level of Comparability - Broad level of product comparability - High
undisputed that, the most
appropriate method (MAM) for determination of Arm's Length Price
is Transactional Net Margin Method (TNMM) whereby ALP is
determined ... required in traditional methods. TNMM is based on net profit
margin relative to an appropriate base, viz., costs, sales, assets,
which the assessee makes from
stock exchange therefore the
generally valuation adopted is based on Net asset Value (NAV) method of the
company of which the shares belongs. The assessee ... account Rs. 27,21,831/-
Total net assets Rs. 70,71,831/-
=============
NAV per share = Net assets of the company
include value of the asset in the net
assessable wealth. He determined the value of the asset on rent
capitalization method. On appeal ... subjected to charge towards tax and
all other assets are outside the tax net. For the
purpose of levy, assets are classified as two
categories
