2022 (8) TMI 205

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....arise for consideration in this appeal. "1. Whether Tribunal erred in law in not holding that for the purpose of Section 48 of the Act the price bargained for by the parties is the full value of consideration, and consequently non reduction of Rs.90,74,103/- in arriving at full value of consideration is perverse in law on the facts and in circumstances of the case? 2. Whether the Tribunal ought to have held that an amount of Rs.90,74,103/-is liable to be reduced from the gross consideration received by the appellant on the principle of diversion at source by overriding the title of facts and in circumstances of the case?." 2. The brief facts of the case are, appellant and her husband entered into share purchase agreemen....

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....e entered into share purchase agreement for sale of shares at Rs.2.70 Crores. The tax component of Rs.90,74,103/- cannot be construed as an expenditure in connection with such transfer nor as cost of acquisition, the only two contingencies which can be considered while allowing deduction. The tax component does not fall within the definition of Section 48(1) of the Act; • that the tax paid by the company is not allowed as deduction. By the same analogy, deduction cannot be allowed in the hands of the appellant; and • that if this Court were to consider assessee's appeal, it may be noted that appellant shall be entitled for exemption only to the extent of 50% proportionate to her share holding. 7. In substanc....

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....s a full value consideration and non-deduction of Rs.90,74,103/- is perverse. 13. Clause 7 of the agreement deals with the payment of taxes and it has been agreed between the parties that seller shall reimburse the tax that may be levied on the company upto the closing date. As recorded in the Assessment Order, tax has been paid in the following manner:   Sl.No Date of payment Name of the Company Asst. year Amount in Rs. 1 21.03.09 GATS 2006-07 11,32,094 2 16.12.08 GATS 2006-07 2,790 3 26.03.08 GATS 2005-06 10,00,000 4 31.03.08 GATS 2005-06 5,00,000 5 02.05.08 GATS 2005-06 9,49,185 6 27.09.08 GATS 2008-09 44,90,034 Total &n....