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2016 (1) TMI 1178 - AT - Income TaxNature of additional consideration received - taxability - interest income or not - Held that:- Additional consideration received by the assessee is part and parcel of the total consideration. It cannot be segregated under the heads ‘original sale consideration’ and ‘penal interest received from Oracle. The business world is governed by its own rules and conventions. If considering the time factor Oracle decided to increase the share price in the offer letter it has to be taken as a part of original transaction. It is noteworthy that in the original offer interest @ ₹ 11.35 per share was offered by Oracle. After considering the delay in dispatch letter and other relevant factors if it decided to increase the interest @ of 16 per share it was a business decision. The assessee had no control over the decision making process of Oracle. If we see the transaction from the debtor/creditor angle it is clear that there was no such relationship between the assesse and Oracle. The assesse owned shares of I-flex and in response to the open offer by Oracle it decided to sell the shares-it was a pure and simple case of selling of shares. The assesse had not entered in to any negotiations with Oracle and transferred the shares as per a scheme that was approved by SEBI. The assesse had not advanced any sum to Oracle and had not received any interest from it for delayed repayment of principal amount. In short, the additional consideration received by the assesse from Oracle was not penal interest and was part of the original consideration. Hence, same is not taxable. - Decided in favour of assessee
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