Cinestaan is an entertainment focused digital media company that offers news, editorials, videos, photos, reviews, and other media. The site is available in several languages, and offers mobile apps as well. Cinestaan monetizes its content through display and native advertising. Its mission is to create content that reaches audiences worldwide. To do this, it has a multi-tiered business model. The company also distributes its films on other platforms, including the Amazon Kindle Store.
Its value is based on the information available at the time of valuation, and projections of future revenue. Its IT department has challenged this approach, arguing that it lacks a material foundation and is irrational, given that projections are based on assumptions and are subject to a variety of factors. The new financial regulations imposed on the social media sector may make it more difficult for companies to compete in the entertainment industry.
A recent judgment by the Delhi ITAT found in favour of the company, which filed an appeal. However, the income tax department filed a petition in the Delhi High Court, claiming that the ITAT’s decision was invalid. The case was dismissed, however, since the company was a startup at the time of the income tax assessment. Cinestaan had adopted the discounted cash flow method to value its shares. As a result, the company did not owe any income tax.
