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2012 (8) TMI 328 - AT - Income TaxNon-Compete fees - taxability - assessee along with some other entities being promoters of a D Ltd, holding 52.60% shares of the said company transferred its shares and in addition to sale consideration received amount as ‘non-compete fees’ - revenue considered the same to be business income as against assessee contention of it being part of capital gain - AY 06-07 - Held that:- It is observed that assessees companies in the present cases were the ‘promoters’ and ‘shareholders’ of M/s. D and were having controlling interest in said company hence consideration paid would fall under the category of "Consideration paid to persons associated with the transferor to ensure that they also do not indulge in competing business" consequently payment for “not carrying out any activity in relation to any business” as covered by the provisions of sec.28(va)(a) and since the said provisions were applicable w.e.f. 01.04.2003, the same will be chargeable to tax as ‘business income’ as held by the AO and not as ‘capital gains’. reliance placed on case of Dr B.V. Raju (2012 (2) TMI 217 - ITAT HYDERABAD )- Decided against Assessee Sale of shares of other companies - dis-allowance of claim of long term capital loss - assessee contended that said shares were transferred as a part of the family settlement and could not be regarded as ‘transfer’ and invoking the provisions of section 47(iv), and treating the loss as a notional loss - Held that:- We restore the matter to the file of the A.O. for deciding this issue afresh on merits after examining the stand of the assessee in the light of relevant documentary evidence. Dis-allowance u/s 14A - Rule 8D - Held that:- As held in Godrej & Boyce Mfg. Co. Ltd. v. DCIT [2010 (8) TMI 77 - BOMBAY HIGH COURT] that disallowance u/s.14A for the years prior to AY 2008-09 has to be made by adopting some reasonable method, we restore the matter to the file of the A.O. for recomputation.
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