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2015 (7) TMI 656 - HC - Income TaxDisallowance of legal and professional charges paid in calculating the capital gains - Tribunal allowed claim - Whether the Tribunal was justified in allowing the entire consultancy charges paid for transfer of shares by violating the provisions of Section 48 of the Act? - Held that:- The sale of shares took place on the account of the legal and professional assistance given by MIFL. The agreement entered into between the shareholders and MIFL clearly setout the pro rata of charges chargelable by each of the shareholders depending upon their shareholding. Insofar as the assessee is concerned, he is a major shareholder. Prior to the entering into the agreement the assessee had written a letter agreeing to pay an additional amount in the event MIFL gets him a good price for his shares. The evidence on record shows the assessee got 72% cents extra when compared to other shareholders. Under the letter dated 25.03.2004 entered prior to the agreement he had agreed to bear the extra charges. Therefore, he being the major shareholder and a director of the company who is a person who was actively involved and interested in selling the shares. He wanted additional amount to be paid to his shares and therefore, he has agreed to pay the additional charges also on the basis of such amount which he would get. It is not in dispute that the assessee got a sum of ₹ 2,98,11,303/- more than for his shares than what he would not get at the rate of USD 4.93 that the other shareholders were paid. It is out of the said additional amount he received, he paid a sum of ₹ 2,84,898,000/- to MIFL as their charges. The payment is not in dispute. Therefore, that is the amount which the assessee incurred as expenditure for sale of shares. That is the amount which is wholly and exclusively incurred by the assessee in connection with such transfer. Under these circumstances the order passed by the Tribunal is in accordance with law and does not suffer from any legal infirmity which calls for interference. - Decided in favour of the assessee.
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